Week 11: March 13, 2022 -- March 19, 2022

Top story of the week:

• Joe Biden is still president.
• Panic sets in: high gasoline prices spook Washington (DC) 
• Two-hour phone call between Joe Biden and China's Xi
• XOM exploring sale of Bakken assets.
• Apple announces its most powerful chip ever. And, here.
  

Top international non-energy story of the week:

• Fourth week of Ukraine-Russian war. No end in sight.
• China shuts down Shenzehn due to Covid concerns. [Turned out to be a non-story; opened back up within a couple of days.]
• Agriculture / fertilizer to be a top story in 2022.
  

Top international energy story of the week:

• Crude oil volatility: spikes to $140; then quickly falls back to $90;
• Mideast not taking Biden phone calls; the myth of spare capacity. And, here.
  
• Panic sets in: Macron says its time to nationalize the oil industry.
• The myth of spare capacity. And, here. And, here.
• Diesel to be one of the big energy stories in 2022.
• Replacing Russian oil.
  

Top national non-energy story of the week:

• Lots of hand-wringing, not much of a story: the Fed raises the "Fed rate" by 0.25%; first raise in years; inflation coming in at 7.9%;
• BRK hits consecutive 52-week highs; due to interest in OXY?
• Tom Brady to return.
• Supply bottlenecks easing?
  

Top national energy story of the week:

• Biden administration set to resume drilling on federal land.
• US SPR down to 33 days of storage.

Top North Dakota non-energy story of the week:

Top North Dakota energy story of the week:

• There may be a reason North Dakota oil production dropped 5% month-over-month.
• Oasis pays first variable dividend of $3.00 / share.

The Energy Chaser: The Williston Herald, Renée Jean;

Geoff Simon's top North Dakota energy stories:

• Quick connects.
  

Operations:

• Lots of work left to be done in the Bakken. And, here.
• U-turn drilling in the Permian.
• The dreaded Bakken decline.

Operators:

Wells:

• The MRO Marion well hits 500K bbls crude oil in about 18 months.
• The spectacular MRO wells in the Antelope-Sanish.
• Updating the incredible WPX Crosby Chase wells.
• CLR reporting huge production in Long Creek.
• A Strobeck well in Alger field is back.
• One of the original Bakken wells goes over 500K bbls crude oil.
• Slawson's original Orca Federal well goes over 500K bbls crude oil.
• The dreaded Bakken decline.
• Hallelujah! Murex reports the Amber Renee!
• Several Whiting Tarpon Federal wells on "AB" list put back into production.

Fracking:

• Do we have a problem?
• The frustration with the lack of fracking spreads.

Natural gas:

Pipelines:

Bakken economy:

Commentary:

• Comment on wells coming off confidential list this next week: fracking.
• Inflation, high gasoline prices? Let them eat cake; take the bus, kill your dog. Bloomberg.
• About those 9,000 permits.
• US set for huge April production jump: EIA.
• International travel: the cost of going around Russia.
• Good and bad oil.

Notes From All Over -- March 18, 2022

The BIG STORY and the THEME this week in the energy sector has been: panic among the Washington (DC) incumbents. 

The price of gasoline has finally caught the attention of the Washington (DC) incumbents, both parties, and the governors of "selected" states.

First up: Maryland lifts the gasoline tax for 30 days. So, a gallon of gasoline will drop from $4.35 to $3.99. Three-ninety-nine sounds a lot better than anything that starts with a four-dollar handle.

But look at this: the Biden administration plans to resume plans for federal oil and gas development. Reported by Reuters. I don't even want to read the article; I didn't want to be disappointed. The headline was enough. Greta is arranging a support group meeting this week for herself, Bernie Sanders, Pocahontas, and Occasional Cortex.

Russia: has proposed tax relief for the oil industry.

Mexico: will halt plan to cut exports. Wow, huge story. Pemex will not meet export-cut target to boost domestic supply.

Market: wow, I'm in a great mood. That very small part of my overall portfolio that I manage all by myself -- is at an all-time high, but just barely. Once oil stocks catch up with the price of oil, and once AAPL gets back to $175, I will be able to retire. Again. 

Bad news: it's clear that no matter how the west wants to "spin" the valor of the Ukrainian people, Putin plans to take the whole country. 

Halliburton: suspends future business in Russia.

High oil prices have not spurred new drilling in the US oil patch. The sustained production is due to DUCs being completed. Link here. No acceleration of US shale rig counts despite oil price being over $100 / bbl. Labor, frack sand, and pipes are issues. And it's not the drilling that matters; it's the frack spreads.

Permian employment: the number of oil workers in the Permian has jumped by 20% in the past week.

Bullish: tech majors like AMZN and NVDA have "reclaimed" their 50-smas, a positive trend signal. ["50-sma" = 50-day simple moving average.]

Travel: US booking sites seeing strong demand for 2022 travel.

Porsche and Apple extend partnership.

And that’s just beginning.

Ringo Starr:30th Annual R'n R Induction Ceremony, 2015

One New Permit; Three DUCs Reported As Completed -- March 18, 2022

Active rigs:

$104.70	3/18/2022	03/18/2021	03/18/2020	03/18/2019	03/18/2018
Active Rigs	37	16	55	65	58

One new permit, #38841:

• Operator: Bowline Energy
• Field: Briar Creek (Williams County)
• Comments:
• Bowline Energy has a permit for a Heen S well in SWSE 35-153-103, Williams County, Briar Creek, 
• to be sited 270 FSL and 1525 FEL

Three producing wells (DUCs) reported as completed:

• 31361, 1,848, Grayson Mill Operating,
• 31466, 910, Grayson Mill Operating,
• 38209, 1,867, Ovintiv Production

For Investors -- March 18, 2022

March 18, 2022, mid-day, from CNBC: 

March 18, 2022: Toyota, major chip supplier suspend production due to Fukushima earthquake. Toyota to suspend operations at more than fifty percent of facilities across Japan.

About Those 9,000 Permits -- March 18, 2022

9,000 permits: that's the number of permits the White House press secretary says the oil industry is sitting on, the number of permits that they "stockpiled" in anticipation of a Biden presidency. 

They say that is more than adequate if US shale would just drill those permits.

Today, it is announced that the number of active rigs in the US now total 766 rigs.

 

Back-of-the-envelope:

• 9,000 / 766 = 12
• those 766 rigs could each drill twelve wells and the 9,000 locations/permits would be exhausted
• a rig can easily drill one well every two weeks
• 12 x 2 = 24 weeks
• March: 2
• April: 4
• May: 4
• June: 4
• July: 4
• August: 4
• September: 2
  
• by mid-September, 2022, those 766 rigs could drill those 9,000 locations
• just in time for the mid-term elections
• am I missing something here?
  
• something tells me that the White House press secretary is either unaware of how fast US shale can drill and / or is unable to do the math
• or both

By the way, that 766-rig count was from March 16, 2022. Since then, the rig count in North Dakota has jumped two or three rigs based on NDIC's daily activity report. 

Bad News On Two Accounts Coming Out Of The Mideast -- March 18, 2022

Both of these stories were posted earlier this morning. Now we get the updates.

The myth of spare capacity: it's now being reported that OPEC+ missed its production target (and the bar was set very low) by one million bopd. One link here.

Blinken: earlier it was reported that US Secretary of State was heading to / already in the Mideast to meet with his counterparts in Saudi Arabia and UAE. It's now being reported that those meetings are not happening "this month." 

Or perhaps ever.

I don't know about you, but it certainly seems OPEC+ doesn't like the US. My assumption is that Saudi will start to purchase military hardware and technology from Russia, not the US. 

Things are never so bad that they cannot get worse. President Biden has that skill set to make that happen. Paraphrasing former President Obama.

Is Orca Living Up To Its Namesake? March 18, 2021

The well:

• 37424, loc/NC, Slawson, Orca Federal 3-23-26H, Big Bend, first production, 11/21; t--; cum 34k 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	25	23312	23031	23256	21276	0	21153
BAKKEN	12-2021	0	0	35	0	0	0	0
BAKKEN	11-2021	6	10674	10430	11949	9810	0	9782
BAKKEN	10-2021	1	459	0	4439	407	0	402
BAKKEN	9-2021	30	0	0	0	0	0	0

A Slawson Osprey Federal Well In Big Bend -- Came Off Confidential List One Year Ago -- March 18, 2022

The decline rates for Bakken wells are considerably less severe. Here's another example. 

The well:

• 36250, conf-->loc/NC-->1,753, Slawson, Osprey Federal 3-26-29H, Big Bend, first production, 4/21; cum 203K 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	30	17797	17229	23526	11029	0	10878
BAKKEN	12-2021	26	12765	13152	20498	7915	0	7786
BAKKEN	11-2021	27	19024	18743	30764	11915	0	11780
BAKKEN	10-2021	29	20894	21442	41171	13173	0	13028
BAKKEN	9-2021	29	25966	25696	50847	16510	0	16364
BAKKEN	8-2021	31	27503	27448	55806	17208	0	17054
BAKKEN	7-2021	30	24182	24574	53188	15271	0	15121
BAKKEN	6-2021	20	20557	19553	43410	13324	0	13222
BAKKEN	5-2021	17	11914	12169	29706	7641	0	7556
BAKKEN	4-2021	29	22064	21510	45719	12712	0	12567
BAKKEN	3-2021	2	0	0	7461	1084	0	1075

 

Update A Few Petro-Hunt Phelps Bay Wells That Came Off Confidential One Year Ago -- March 18, 2022

The wells:

• 37461, conf->F/A, Petro-Hunt, USA 153-95-13C-12-3H, Phelps Bay, first production, 3/21, t--; cum 253K 1/22; cum 253K 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	14556	14528	7968	50599	50276	107
BAKKEN	12-2021	31	17063	17183	9465	59350	58202	932
BAKKEN	11-2021	30	19869	19939	10566	58204	55720	2275
BAKKEN	10-2021	31	22221	22025	10457	51759	46958	4585
BAKKEN	9-2021	30	23440	23571	10162	46631	40930	5492
BAKKEN	8-2021	31	26805	26747	10887	47378	47048	114
BAKKEN	7-2021	31	26292	26275	11186	44218	39297	4705
BAKKEN	6-2021	30	25593	25680	11988	42147	41852	86
BAKKEN	5-2021	31	30698	30773	15038	49148	48461	471
BAKKEN	4-2021	30	33264	32985	14378	54657	50919	3529
BAKKEN	3-2021	31	10115	10140	8474	13517	12464	837
BAKKEN	2-2021	2	852	777	580	884	809	61
BAKKEN	1-2021	1	16	0	0	0	0	0
BAKKEN	12-2020	5	2327	1934	2329	2343	2193	117

• 37460, conf-->F/A, Petro-Hunt, USA 153-95-13C-12-4H, Phelps Bay, first production, 12/20; t--; cum 30K 1/21; cum 340K 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	12416	12430	7573	55785	55327	242
BAKKEN	12-2021	31	14460	14505	8252	65361	61802	3343
BAKKEN	11-2021	30	17293	17418	9541	71305	40719	30377
BAKKEN	10-2021	31	19895	19722	10595	65781	46122	19443
BAKKEN	9-2021	30	22321	22388	10243	62589	37727	24653
BAKKEN	8-2021	31	27137	27184	11524	62240	58381	3643
BAKKEN	7-2021	31	23763	23644	12101	43317	38465	4636
BAKKEN	6-2021	30	22864	22889	12702	38947	38373	365
BAKKEN	5-2021	31	33336	33364	13919	57611	45110	12285
BAKKEN	4-2021	30	37236	37341	14510	57697	41636	15852
BAKKEN	3-2021	31	42760	43329	18909	72231	59795	12220
BAKKEN	2-2021	28	35879	35274	18291	57429	57087	147
BAKKEN	1-2021	31	21907	21772	11845	32458	31671	571
BAKKEN	12-2020	14	8571	8144	11140	10460	10102	281

• 37459, conf-->loc/A, Petro-Hunt, USA 153-95-13D-12-5H, Phelps Bay, first production, 12/20; t--; cum 33K 1/21; cum 263K 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	8822	8699	7940	37827	37409	202
BAKKEN	12-2021	31	9962	10085	9619	43490	42593	681
BAKKEN	11-2021	30	11274	11162	9752	47450	40708	6533
BAKKEN	10-2021	31	13602	13633	9653	53045	34144	18685
BAKKEN	9-2021	30	15629	15670	10789	54903	41048	13646
BAKKEN	8-2021	31	19545	19545	12796	58680	55389	3075
BAKKEN	7-2021	31	21797	21697	12936	50160	43492	6452
BAKKEN	6-2021	30	17071	17166	10970	30397	24095	6093
BAKKEN	5-2021	31	24903	24800	12676	42252	41287	749
BAKKEN	4-2021	30	26516	26580	17345	45983	41693	4081
BAKKEN	3-2021	31	33260	33321	22671	59424	44590	14618
BAKKEN	2-2021	28	26862	26631	20495	46061	45826	40
BAKKEN	1-2021	31	21756	21885	14550	33835	32915	704
BAKKEN	12-2020	20	11533	11084	9582	14066	13711	271

Updating The WPX Crosby Chase Wells -- March 18, 2022

By the way, quick! Who now "owns" WPX?

Periodically I go through the "new wells reporting" list. Here are a few wells from a year ago, 1Q21, that came off the confidential list at that time but had not posted any production. 

No cherry picking. This was simply the very first one that popped up:

• 37308, drl/NC-->drl/A, WPX, Crosby Chase 2-1HC, Spotted Horn, first production, 5/21; t--; cum 236K 1/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	14143	14155	10983	17422	5850	10882
BAKKEN	12-2021	31	20819	20676	13658	30396	15498	14553
BAKKEN	11-2021	30	20966	21033	11827	26438	26206	0
BAKKEN	10-2021	31	23926	23825	14525	27156	21793	4950
BAKKEN	9-2021	30	27461	27369	13823	32954	19714	12815
BAKKEN	8-2021	31	26859	26859	18120	27342	23043	4010
BAKKEN	7-2021	31	47048	47364	32437	47895	39290	8450
BAKKEN	6-2021	30	48434	48462	38218	60090	5601	49147
BAKKEN	5-2021	2	5938	5595	3940	11	0	0

Others:

• 37704, drl/NC-->947, Petro-Hunt, USA 153-95-11C-2-1HS, Charlson, first production, --; t2/21 cum 247K 1/22;

• 37307, drl/NC-->drl/A, WPX, Crosby Chase 2-1HY, Spotted Horn, first production, 5/21; t--; cum 272K 1/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	18916	18881	13663	28506	10066	17750
BAKKEN	12-2021	31	23969	23854	17331	30920	17130	13445
BAKKEN	11-2021	30	32542	32514	21989	40491	40227	0
BAKKEN	10-2021	31	20869	20796	14454	23686	18890	4448
BAKKEN	9-2021	30	28638	28542	20602	31158	18640	12093
BAKKEN	8-2021	31	32268	32268	29320	33398	25025	8362
BAKKEN	7-2021	31	54296	54595	45620	56196	20803	35393
BAKKEN	6-2021	30	45961	46511	43170	57062	4574	47410
BAKKEN	5-2021	8	14717	13868	13125	43	0	0

• 37306, drl/NC, WPX, Crosby Chase 2-1HG, Spotted Horn, first production, 6/21; t--; cum 266K 1/22;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	19777	19770	9783	18556	8218	9648
BAKKEN	12-2021	31	27387	27158	14968	33139	18959	13835
BAKKEN	11-2021	30	20923	21010	12366	26524	26304	0
BAKKEN	10-2021	31	26379	26269	15351	31549	25122	6017
BAKKEN	9-2021	30	31029	30925	19212	31215	18673	12117
BAKKEN	8-2021	31	28986	28986	15336	29160	21291	7610
BAKKEN	7-2021	31	53271	53650	27042	53591	48285	5151
BAKKEN	6-2021	26	58150	57771	42086	71250	6530	58361
BAKKEN	5-2021	0	0	0	0	0	0	0

• 37305, drl/NC, WPX, Crosby Chase 2-1HZ, Spotted Horn, no production data, see this post;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	12700	12761	9841	14532	5452	8412
BAKKEN	12-2021	31	22598	22474	17242	30282	16590	13358
BAKKEN	11-2021	30	27981	27999	20453	35014	34768	0
BAKKEN	10-2021	31	23132	23041	17242	26301	21116	4773
BAKKEN	9-2021	30	28521	28425	21528	31858	19058	12375
BAKKEN	8-2021	31	25179	25179	21799	26111	20162	5938
BAKKEN	7-2021	31	47797	48128	40172	49566	28581	20985
BAKKEN	6-2021	30	50888	50919	45812	63797	5581	52611
BAKKEN	5-2021	4	6275	5913	5713	21	0	0

I'm going to quit here. I need to update the Crosby Chase post. LOL. The Crosby Chase wells are tracked here.

The Panic Is Really Setting In -- Now Macron Says Its Time To Nationalize Oil -- March 18, 2022

Can you imagine Macron running an oil company? Link here. I would provide the Bloomberg link but I'm getting tired of the paywalls.

Nationalize US oil: I said it would never happen, but an astute reader pointed out that one can nationalize any industry different ways. Through Congressional action or executive orders, the government can issue rules and regulations that have the same effect as the "classic" method of nationalizing something. 

Tags: do I need a new tag for the blog, "the 2022 oil panic"?

Amazing! Already Friday; One Well Coming Off Confidential List; Oil Continues To Melt Up -- March 18, 2022

SPR: others do, but I don't. I don't buy into the seriousness of the depletion of the SPR. But, for the record: 

Incredibly serious: the other day I mentioned that world leaders were not taking phone calls from Joe Biden.  

Now this: US SecState flies to Mideast to speak with counterparts. Saudi Foreign Ministry official: no meeting has been scheduled with US Sec State Blinken. It will probably happen but Saudis will let Blinken cool his heels for a few days, giving him a chance to get over jet lag. 

Why US shale is cautious: lousy piece by Robert Rapier over at oilprice.com. I would not have bothered to link this except for this paragraph:

Thus, we have oil production that can’t bounce back quickly because some has been shut in, and new production that can’t proceed as quickly due to manpower and material shortages (e.g., fracking sand). It’s not simply that oil companies are sitting on permits. They are working through them. The number of rigs drilling for oil and gas has risen by 60% over the past year. But it can take years for a permit to translate into oil production (if the location even yields oil).

Absolutely not true for the Bakken,

• where there is "never" a dry hole; and,
• from permit to production, six months

Update on XOM and the Bakken: no news and maybe won't even happen. Link to Zacks.
I don't think XOM can find a single buyer for its Bakken package.

Did y'all see this yesterday? DVN at the top. 

One of the best blog posts I ever did was on Devon, last August 21, 2021. Readers must like it also; it's the number one hit when searching for Devon on the blog. I don't get many things right, but I right on with this one. I did not buy Devon at the time -- or at least I don't recall buying Devon -- but since then have built a nice position, simply through serendipity. 

Teslas waiting in line to get re-charged: link here. We've been talking about this for years on the blog, but this is a new wrinkle. 

When a bank of Tesla charging stations are filled, the charging process can take twice as long -- simply too much electricity demand for supply available. Folks in Louisiana, along I-10, had an hour wait or longer to re-charge. But when they get home they will rave to their neighbors how great their trip was. 

Jim Cramer: do you remember the recent story in which Jim Cramer said he would never tough "oil" again. 

Never mind. His eleven top picksas compiled by this producer: the top four -- Pioneer Natural Resources, Coterra Energy, Devon Energy, and Halliburton. Two were banks/financial: #10 and #11; Wells Fargo and American Express. One was a semiconductor, #8, NXP Semiconductors. In another Jim Cramer list, which I did not keep/link, he mentions 15 stocks to stay away from. Two of them Rivian and ATT. ATT was at the top of his list to avoid.

Oil:

• WTI: up 1.4%; up $1.42; trading at $104.40, pre-market.
• Brent: up 2.26%; up $2.41; trading at $109.10, pre-market.
• expect to see/hear more signs of panic coming out of Washington (DC)

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

Active rigs:

$104.40	3/18/2022	03/18/2021	03/18/2020	03/18/2019	03/18/2018
Active Rigs	35	16	55	65	58

Friday, March 18, 2022: 31 for the month, 140 for the quarter, 140 for the year

• 38450, conf, CLR, Jack 9-9HSL,

RBN Energy: carbon-capture projects hold promise, but hurdles remain, part 6. I suppose some day I will with I had archived this, but I just can't get excited about any of this. I'll let others follow it if they want, but not me. except for headline stories and significant stories coming out of North Dakota.

When U.S. lawmakers introduced the 45Q tax credit in 2008, they were planting a seed they hoped would one day sprout into a flourishing carbon-capture industry. As the years wore on and the number of successful projects remained small, they added a little fertilizer in 2018, not only enhancing the value of the credits but easing some of the limitations in the earlier legislation. It’s now 2022 and, with climate concerns and the energy transition at top of mind, Washington is again looking at ways to make the tax credit more effective and spur new growth in carbon-capture projects. In today’s RBN blog, we look at how economic and technological challenges have so far limited the success of carbon-capture initiatives.