MRO With Two New Permits; Eighteen Permits Renewed; Four DUCs Reported As Completed; Home Depot 4Q21 Earnings -- Topped Forecasts By Significant Margin -- Two's Day -- 2-22-22

Home Depot: 4Q21 beats.

• Home Depot on Tuesday said sales grew 11% in the fiscal fourth quarter, as it topped Wall Street’s expectations and said it sees sales growth ahead for 2022.
• The home improvement retailer said it expects earnings per share growth to be in the low single digits and sales growth to be “slightly positive” in the coming fiscal year.
• boosts dividend by 15%.
  

FANG: posts higher profit; boosts dividend by 20%, to $2.40 / share (annual); link here.

Well permits: January's total permit count for oil and gas wells in the US is the second-lowest in the last ten years. Link here. Let's go Brandon. White House response:

• "we're monitoring the situation"
• "what's proper temperature to chill champagne?"
• ESG: energy stop growing
  

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

Active permits:

$92.35	2/22/2022	02/22/2021	02/22/2020	02/22/2019	02/22/2018
Active Rigs	31	15	54	66	56

Two new permits, #38790 - #38791, inclusive:

• Operator: MRO
• Field: Bailey (Dunn)
• Comments:
• MRO has permits for a Dunford well and a Beesaw well in Bailey oil field; 
• Dunford, NWNW 15-146-93, 767 FNL and 936 FWL; 
• Beesaw, SESE 9-146-93, 404 FSL and 1246 FEL

Eighteen permits renewed:

• Hess (12): four SC-Bingeman permits and one SC-JW Hamilton permit, all in Williams County; three EN-Kiesel permits in Mountrail County; and, four AN-Lone Tree permits in McKenzie County;
  
• Rimrock (3): three Moccasin Creek permits in Dunn County;
  
• Murex (2): a Michael Douglas permit and a Patricia Ann permit, both in Williams County;
  
• EOG:a Hardscrabble permit in Williiams County
  

Four producing wells completed:

• 38185, 1,073, CLR, Tallahassee FIU 7-21H, Baker, minimal production;
  
• 38186, 998, CLR, Tallahassee FIU 6-21H, Baker, minimal production;
• 38187, 1,214, CLR, Tallahassee FIU 5-21H, Baker, minimal production;
• 38188, 1,165, CLR, Tallahassee FIU 4-21HSL, Baker, minimal production;

Legacy Fund -- Deposits -- February, 2022

Link here.

***********************

Clearing Out The In-Box -- Mid-Day -- Two's Day -- 2-22-22

Apple: this is quite clever. I think most folks are missing the big reason for doing this. Bowdoin College will provide every student -- I read that as "every" student -- not just incoming freshman -- with a 13-inch MacBook Pro with the M1 chip, an iPad mini, and an Apple Pencil with pre-loaded software. Link here. With tuition, fees, room and board well north of $75,000 (?) per year, this is a "rounding" error for parents. 

The real reason for this: it simplifies things for the IT department. Tech support doesn't come cheap for the college. The IT department only has to manage one vendor. This is brilliant. Our oldest granddaughter was specifically told by her university NOT to bring a printer. The university would provide all printer support. This was done for one reason: the IT department would otherwise be overwhelmed with printer installations and maintenance. Of course, with small dorm rooms, it's also wonderful that students aren't cluttering their rooms with two or three printers.

European natural gas: 70% supplied by three countries -- US, Qatar, and Russia. EIA. 

Russian sanctions: Nada. Zilch. Zero. Link here. 

Water: Tesla, Berlin, and no vehicles. Link here.

Devon. Look at social comments here. This might get one or two Bakken readers excited.

Spare capacity: link here.

*************************************
The Book Page

I'm in my paleontology phase, re-reading a new book on "how mountains grew" by John Dvoak and re-reading several older books on paleontology, evolution, dinosaurs, etc.

One of the things that strike me is how long events take -- LOL. I don't think journalists and politiciians today get it. Global warming was going to "wipe us out" in ten years. LOL. 

In broad terms, every era was punctuated with periods that either saw an explosion or flourishing of life followed by a period of mass extinction of some kind or another. And these periods lasted millions of years. Think about that. Even if they only lasted thousands of years that would be immeasurable from a single person's lifespan. Even if periods lasted a thousand years, that's a hundred times longer than ten years. 

And these periods did not last a thousand years, or tens of thousands or hundreds of thousands of years. They lasted thousands of thousands of years. 

A thousand-thousand years is one million years, and these periods lasted fifty million years. 

And interestingly enough, it was the "snowball" earths that caused the most damage for living organisms. "Warmth" and rising CO2 levels actually were incredibly beneficial for life. 

The Permian Basin? Fifty million years for eleven (or more) oil formation plays to be laid down. Fifty million years. And that period went back and forth between flourishing life and dying life. And the Permian ended with the largest mass extinction of all, the Permian-Triassic "great dying." From wiki:

The Permian–Triassic extinction event, also known as the End-Permian Extinction and colloquially as the Great Dying, formed the boundary between the Permian and Triassic geologic periods, as well as between the Paleozoic and Mesozoic eras, approximately 251.9 million years ago. 

It is the Earth's most severe known extinction event, with the extinction of 57% of biological families, 83% of genera, 81% of marine species and 70% of terrestrial vertebrate species. It was the largest known mass extinction of insects.

There is evidence for one to three distinct pulses, or phases, of extinction.

The scientific consensus is that the causes of extinction were elevated temperatures and in the marine realm widespread oceanic anoxia and ocean acidification due to the large amounts of carbon dioxide that were emitted by the eruption of the Siberian Traps. 

It has also been proposed that the emission of additional large volumes of carbon dioxide generated by the thermal decomposition of hydrocarbon deposits, including oil and coal, by the Siberian Traps and emissions of methane by methanogenic microorganisms contributed to the extinction. The speed of recovery from the extinction is disputed. 

Some scientists estimate that it took 10 million years (until the Middle Triassic), due both to the severity of the extinction and because grim conditions returned periodically for another 5 million years. 

However, studies in Bear Lake County, near Paris, Idaho, and nearby sites in Idaho and Nevada showed a relatively quick rebound in a localized Early Triassic marine ecosystem, taking around 3 million years to recover, suggesting that the impact of the extinction may have been felt less severely in some areas than others.

Ten years. LOL. 

US New Housing Starts -- February 22, 2022

 Updates

Later, 4:26 p.m. CT: Home Depot posts 4Q21 earnings; tops forecast. 

Later, 4: 21 p.m. CT: see first comment. 

Later, 12:01 p.m. CT: this is quite remarkable. I posted the original post earlier this morning. Now, I note that Home Depot announced that it raised its dividend -- and raised it considerably! Link here. Dividend history here. Previous quarterly dividend was $1.65. New dividend, $1.90, record date, 3/10/22 and payable date 3/24/22. That's a 15% jump in the quarterly dividend.

Original Post

US new housing starts, link here. 

The problem with Rick Santelli, CNBC when he reports this data, he never shows the graph. His data is simply month-over-over, with revision, with perhaps a short historical context. Like monthly rig counts, monthly new housing starts is background noise. It's the long-term trend. 

New houses, unlike existing house sales, drives durable goods -- washers, dryers, EV outlets in garages, solar panels, furniture, entertainment centers, and sleep-number beds -- and durable goods drive trucking and trains. 

I will even hazard a guess that many new houses come with a new car these days. 

And how much of this is driven by post-Covid, geographical moves -- from high-tax, mask-mandated-crazy states to less restrictive, lower tax states? And with high heating costs in New England, how many folks moving to states with low-energy costs? And it's the folks with income that can afford to move. Low income and low-middle income -- the folks that don't pay much in state taxes -- cannot afford to move.

Look at that jump pre-Covid -- no one predicted Covid -- and yet, that spike just prior to 2020 is quite remarkable. Never discussed, never explained but that's certainly eye-catching.

Then, of course, we have the debacle that was Covid -- but the slump did not last long and within six months or so the curve was back to where it was pre-Covid. The question is: to what extent are housebuilders still playing catch up?

My hunch: the corresponding graph for Germany, France, and Great Britain looks nothing like this graph. Let's check:

For Germany:

One word: recession.

France. If you check out France, be sure to expand the graph to ten years.

Waking Up To A New World Order -- February 22, 2022

Updates

Later, 8:20 a.m. CT: amazing how fast WTI / Brent is moderating less than twelve hours after the "minor incursion.”

Original Post

Most interesting: Ukraine has been simmering for decades. No one had "Russian incursion" on their 2022 bingo card.

Zelenskyy: already talking about a post-incursion Ukraine suggesting things aren't going to be that bad. In fact, remove the politicians who are trying to make things worse and this is actually going to be good for the region. On so many levels. If that minor incursion stops here, in fact, some can argue Zelenskyy was "right" all along: Putin was not going to attack Ukraine; the two separatist provinces were more Russian than Ukraine. My hunch: folks in the know have already moved on. 

Spare capacity? Going. Going. Gone. Russia pumped 10 million bopd in January, 2022, and may exhaust its remaining 320,000 bopd spare capacity by mid-year. The "minor incursion" won't help. Platts Oil on twitter. 

UAE: second only to Saudi Arabia in the Mideast plans to invest $127 billion, 2022 - 2026, to expand its oil operations and develop .... drum roll ... its .... drum roll ... low-carbon oil business. Memo to self: google low-carbon oil. Here it is ... Forbes, The Oil Industry Jumps on the Low Carbon Bandwagon, February 8, 2021 -- that was one year ago. Two pieces:

• decrease combustion of fossil fuels via conservation and a switch to renewable energy; and,
• carbon capture and storage

My hunch: the UAE budget --

• $125 billion on conventional oil exploration, production, and export;
• $2 billion on "other stuff" that sounds good

Memo to self: update the Biden presidency scorecard.

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

Active rigs:

$94.12	2/22/2022	02/22/2021	02/22/2020	02/22/2019	02/22/2018
Active Rigs	33	15	54	66	56

Tuesday, February 22, 2022: 43 for the month, 98 for the quarter, 98 for the year

• 38149, conf, CLR, Flint Chips FIU 14-5H, Cedar Coulee, no production data,
• 38062, conf,  Hess, GO-Soine A-156-97-2932H-3, Dollar Joe, first production, 8/21; t--; cum 104K 12/21;
• 37781, conf, Hess, EN-Rice_A-155-94-0310H-6, Manitou, first production, 8/21; t--; cum 121K 12/21;

Monday, February 21, 2022: 40 for the month, 95 for the quarter, 95 for the year

• 38148, conf, CLR, Flint Chips FIU 13-5H1, Cedar Coulee, no production data,

Sunday, February 20, 2022: 39 for the month, 94 for the quarter, 94 for the year

• 38147, conf, CLR, Flint Chips FIU 12-5H, Cedar Coulee, no production data,
• 37798, conf, Koda Resources, Stout 342-3BH, Fertile Valley, no production data,
• 37797, conf, Koda Resources, Stout 3410-2BH, Bar Butte, no production data,

Saturday, February 19, 2022: 36 for the month, 91 for the quarter, 91 for the year

• 34062, conf, Enerplus, Recluse 149-92-32C-29H-TF1, Heart Butte, first production, 8/21; t--; cum 92K 12/21;

RBN Energy: lucrative opportunities for renewable propane flow into low-carbon fuel markets. 

It burns just like propane, smells just like propane, and gets transported just like propane. But instead of being extracted at gas processing plants or refineries, it is produced from renewable feedstocks like used cooking oil or soybean oil, and so it has a low carbon intensity. That means it is eligible for low-carbon fuel credits, like those available in California. Renewable propane has been around for years but has never gotten much traction due to a combination of technical and economic issues. Now that is changing, with a deal announced last week by a major propane retailer and a biorefiner showing the way to a win-win-win for the producer, the marketer, and the environment. In today’s RBN blog, we begin a deep-dive series on where renewable propane comes from, why it has been a challenge to get the market going, and what changes may create significant opportunities across the renewable propane value chain.

Notes From All Over -- The Early Morning Edition — Two’s Day -- 2-22-22

Oil, 4:00 a.m. CT, note WTI-Brent spread:

• WTI: $95.61; up 5%; up $4.54 overnight;
• Brent:$98.88; up 3.66% up $3.49 overnight; was flirting with $100 earlier; has dropped back a bit;

Paul Farmer: this one is personal

• public-health pioneer dies of cardiac event at age 62;
• a pioneer in global health, March 5, 2021;

Luxurious garage conversion: this one is personal

• link here;
• Sophia and I did this with our garage, but more "bat cave" than luxurious

Global events:

• with regard to inflation, cost of diesel in California, and Ukraine, Biden is a disaster; and it's only going to get worse
• Biden metrics need to be updated; Ukraine was not on my 2022 bingo card;
  
• Putin, Trudeau? History will sort these two out.
• a little bit of history puts this in perspective; 
• UN Security Council on Ukraine crisis will be chaired by Russia, which currently hold the presidency of the Council;
  
• Olympics: NBC draws lowest Olymic ratings ever; dropped 42% from 2018.

Oil:

• Finally: after ten months, workers ratify Exxon refinery offer; it will take the average blue collar worker three years to recover from this craziness; someone couldn't do the math;
• Are US shale firms spending enough? Link to Irina Slav.
• Nigeria: no need for extra OPEC+ supplies;
• Chart of the day: December 22 call options -- $100, $110, $125, and $150;
• California diesel: $5.00 / gallon; this will get truckers' attention;
• US oil imports from Russian reached record high under Biden's administration;

Fair share:

• 62% of Americans pay no federal income taxes; 

Logistics:

• US import surge is skipping the train; moving to trucks;

Investing:

• Warren Buffett's annual letter will be released this Saturday;

Burning ship, luxury EVs:

• Fire remains out of control; EV batteries; VW lost $155 million;
• Porsche, Bentley, and VWs

Global warming:

• I'm not sure all his "facts" are factual, but in general, he is correct; link here;