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Friday, April 1, 2022

Premium Oil Development Acreage Continues To Expand In North Dakota -- Tier 3 Becoming Tier 1 -- April 1, 2022

NDIC: premium oil development acreage continues to expand in North Dakota -- March 29, 2022. Source: pdf.

I was hoping to provide some comments, but I just got too far behind.

"Inside" the pdf is a link to the most recent presentation, or go direct here

A reader sent me this yesterday but wanted to get it posted before it "got stale."

I will come back to this later.

Clearing The Decks For Next Week -- April 1, 2022

CLR: Jack Stark entered into Consulting Agreement, steps down effective today as President. Source. I have no idea what this is all about, but the comments at the link might provide more detail. Or not. 

AMLO vs Biden:

  • one demands faster action;
  • the other does everything he can to slow things down;
  • source.

Biden's Surge: I do believe "everyone" agrees that the Biden Surge will have unintended circumstances. Source. The Biden Surge is tracked here.

The executive order: the whole enchilada

SPR: one giant spread trade. We actually talked about this on the blog earlier. The link is to Reuters. And here, also. Most interesting: we talked about this earlier when we mentioned backwardation vs contango.

Fun fact: there's still Iranian crude oil in the SPR caverns. Source. If you look at the graphic at this post, it makes sense.

Russian oil production: already signs of a decline. Source

The myth of spare capacity:

  • OPEC March, 2022, oil output rises a paltry 90,000 bopd month/month to 28.54 million bpd
  • OPEC states' compliance with OPEC+ output cut pledges rises to 151% in March from 136% in February
  • it's almost like OPEC is running out of spare oil apacity;
  • OPEC+ spare capacity is insufficient;
  • if anyone thinks OPEC is complying by 150+% out of the goodness of their hearts, I have a bridge to sell you.
  • source.

Capitalization: source.




OPEC: to use Rystad, WoodMac data instead of IEA. Source

Expanding LNG and renewables: Sempra and Total. Source.

Breaking: Olivia's Soccer Team Advances -- April 1, 2022

Texas High School Girls Soccer State Playoffs and Championship

Soccer 5A, Regions 1 & 2

Quarterfinals, left-side bracket

Grapevine, TX defeats Wichita Falls, 2 - 0. 

If Grapevine reaches the championship game, the championship game for region 1 and region 2 will be the sixth and penultimate game in this series of playoff and championship.

This was the third game of six region 1 and region 2 for Olivia's team.

Next game: regional semi-finals.

Then: regional finals for region 1 and region 2.

Sixth game: region 1 vs region 2 to determine the team that will play winner of regions 3 & 4 to go to final game and state championship.

Meanwhile, Soccer 5A, Regions 3 & 4 are competing in the same manner.

The seventh game: the winner of Regions 1 & 2 will play the winner of Regions 3 & 4 for the state championship. However, I don’t think there is actually a seventh game. If not, there are two 5A state champions.

Week 13: March 27, 2022 -- April 2, 2022

Top story of the week:

  • Joe Biden is still president.
  • Will Smith resigns from Hollywood's Screen Actors Guild.

Top international non-energy story:

Top international energy story:

  • Biden's Surge, SPR release, supported by nation's around the world.
  • Myth of spare capacity exposed. 

Top national non-energy story:

Top national energy story:

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:

Operators:

Operations:

Wells:

Fracking:

Natural gas:

Pipelines:

Bakken economy:

Commentary:

Three New Permits; Ten Permits Renewed; And One DUC Reported As Completed -- April 1, 2022

Active rigs:

$99.27
4/1/202204/01/202104/01/202004/01/201904/01/2018
Active Rigs3413436560

Three new permits, #38864 - #38866, inclusive:

  • Operator: Liberty Resources
  • Field: Enget Lake (Mountrail)
  • Comments: 
    • Liberty Resources has permits for three CA S wells in SESE 20-158-93; 
      • to be sited between 310 FSL and 380 FSL and 250 FEL;

Ten permits renewed:

  • Enerplus: Zebra, Warthog, Elephant, Meerkat, Aardwolf, Fossa, Gazelle, Lemur, Sturgeon and Salmon, all in Dunn County, all in SWNE 3-148-94;

One producing well (DUC) reported as completed:

  • 36641, 3,675, Hess, BL-S Ramberg -155-95-0601H-6, Beaver Lodge, first production, 2/22; t--; cum 11K after 15 days; there are four BL-S Ramberg wells on that pad; this is the first to report;

Interesting Music Video -- April 1, 2022

See how many personalities you can identify.

The video:

My Sweet Lord, George Harrison

The wiki entry for this song

Personnel:

From the wiki entry: According to Simon Leng (except where noted), the following musicians played on Harrison's original version of "My Sweet Lord". Leng states that his keyboard credits for All Things Must Pass are "more indicative than authoritative."

If you are not familiar with the personnel, recommend checking in on Pete Ham and Tom Evans.

The personnel who played on this song is quite remarkable. 

Other items of note from the wiki entry:

According to a chart published by PPL in August 2018, coinciding with the 50th anniversary of Apple Records' founding, "My Sweet Lord" had received the most airplay in the 21st century of any song released by the record label, ahead of Lennon's "Imagine" and the Beatles' "Hey Jude."

Regarding the video above:

To promote the 50th anniversary reissue of All Things Must Pass in December 2021, the Harrison estate released a music video for the 2020 mix of "My Sweet Lord". Executive produced by Dhani Harrison and David Zonshine, it was written and directed by Lance Bangs, and stars Mark Hamill, Vanessa Bayer and Fred Armisen as secret agents investigating a mysterious phenomenon around Los Angeles. Much of the video follows Armisen's perspective, from a room filled with books to a large cinema showing a fictional film of George Harrison's home footage, titled All Things Must Pass. The video features cameos from many celebrities – including Starr, Jeff Lynne, Joe Walsh, Dhani and Olivia Harrison – and ends with Armisen and Bayer's characters solving the mystery by hearing the song for the first time on their car radio.

You might recognize Fred Armisen and Vanessa Bayer from SNL's The Californians, which may simply be the best skit series ever seen on SNL. Briefly here

The Californians is a recurring sketch on Saturday Night Live which parodies a soap opera and features Karina (played by Kristen Wiig), Devin (played by Bill Hader), Stuart (played by Fred Armisen), Trey (played by Kenan Thompson) and Rosa (played by Vanessa Bayer), who is also the only brunette, as wealthy blondes with Valley Girl accents exaggerated to the point of incoherence
Throughout the melodramatic plot developments in the sketch, much of the dialogue consists of descriptions of freeway routes taken from place to place. Each installment includes three scenes, each of which ends with all of the characters in the room crowded around a single mirror and gazing at their own reflections.

The Market: The Big Stories -- Automobiles, Chips, And Oil -- In Other Words -- Same Ol', Same Ol' -- April 1, 2022

March jobs:

  • 431,000 "new" jobs vs expected 490,000
  • February: upwardly revised: to 750,000 --
  • but a drop from 750,000 to 450,000 is alarming, considering the number of openings
  • unemployment ticks down to 3.6% vs 3.7% expected -- does not fit definition of stagflation (three components: inflation, no GDP flat, and high unemployment, the third being the one the Brits are concerned about the most)
  • average hourly earnings, in-line

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

The market: similar today to what happened yesterday. Oil companies doing better than market in general before the big afternoon sell-off. And then they all did badly.

The buzz:

  • the Biden Surge will ensure price of oil will stay higher longer, perhaps just not as high;
  • IEA suggests sanctions will result in about a loss of three million Russian bopd net; source;
  • something tells me the release was more than political; there is outright panic;
  • since the release is to occur over six months, and by then, almost nothing left to release, have we telegraphed Putin that sanctions will come off after the mid-term elections, regardless of Ukraine?
    • it wouldn't be the first time we've telegraphed our intentions to Putin;
  • Brazil: despite dry holes reported by XOM, analysts still suggest Brazil will pay off big for XOM; source;
  • Venezuela: scrambles to find oil tankers; expects sanctions to be lifted; can you spell CVX? Source.

UK energy crisis: the number of "fuel-stressed households" in the UK doubled overnight; link to Charles Kennedy. If it's being reported by Charles Kennedy, you can take it to the bank. 

EU: inflation hits new peak; ECB's dilemma; source.

Semiconductors, chips:

  • one would think these companies would be doing better by now; what's up?
    • this is perhaps the biggest enigma right now; Covid challenges in Asia?

Autos:

  • it looks like I was a bit too optimistic;
    • I suggested a few weeks ago that there would be a glut of new cars reaching dealers this summer; now, not so sure:
    • reported yesterday, GM and Ford to stop production of sedans for one week, due to chip shortage;
    • now, add Stellantis: will shut down its Belvidere, IL, midsize SUV plant, and its Detroit, MI, full-size SUV plant next week for one week; source;
    • Ford Mustang production also temporarily halted due to chip shortage -- that was back in January, 2022; source;
    • now, today, Ford to halt Mustang production at Michigan due to chip shortage; source;
    • the key word is "significantly" -- Ford Mustang Mach-E sales down significantly in February, 2022; source; note the source for this story; volume dropped by almost half year-over-year; margins already very, slim on EVs; will get worse
    • note the spin they try to put on this story

Ford Mustang Mach-E Ford Mustang Mach-E sales in February amounted to 2,001, which is surprisingly 46.5% less than in February 2021. 
We hoped that the Mach-E would improve as the demand is high, but the company is clearly struggling on the production side. 
We heard that in February production was halted due to a lack of semiconductors, which means that the situation will not likely improve significantly in the near future
Nonetheless, the Ford Mustang Mach-E was responsible for 1.6% of the total Ford sales volume in the US.

  • Nonetheless.
  • None.
  • Less.
  • I don't know about you, but "in the near future" suggests at a minimum, 18 months;
  • and then, this, chariots on fire; it's not just Teslas any more: Ford recalls 737,000 US vehicles over software and fire-risk issues; source;
  • I continue to accumulate shares in Ford, but there is obviously no hurry. no FOMO;
  • by the way, making things worse for automobiles manufacturers and consumers: President Biden reinstated the huge CAFE requirements for US car companies; these mandates will significantly increase the cost of cars people want, and increase the costs of cars people don't want even more.
    • before this is over, we'll all be driving pickup trucks

The WarnerBros.Discovery company: update here. It will be fascinating to see if CNN changes. 

April 1: a reader suggested re-naming "April Fool's Day" -- President Biden's Day. 

NYTimes "Wordle": has announced "sensitive words" will no longer be used; as a five-letter puzzle this means "biden" as a word can never be used, as in "biden' time until things change."

Newer Wind Turbines Destined To Fail Sooner -- April 1, 2022

One of the themes for 2022 (tabbed at top of blog; link here):

The energy transition is dead. Tracked here

A reader, this morning, submitted this, a perfect example of what Peter Zeihan means when he said "energy transition is dead." We simply can't afford it (and it won't save the world anyway):

I admire their use of the term renewable energy. 
The lifespan of the new, high output windmills is drastically lower than ones built just a few generations ago. The dynamic loads are nearly impossible to deal with so the generators and blades are prone to failure at an alarming rate. 
If only they had a time machine to suspend us until the actual renewable energy replacement system is fully built and as reliable as the system we have. I believe they have met their demise and are just playing out the last act. 
We the people and our economy can’t cover the expense of the renewable energy transformation at the current rate, let alone one that would actually replace the current system. We have met the intersection of the climate dogma verses reality.

*******************************
For The Archives

Mileage / gasoline costs for the two cars I drive.


Notes From All Over -- April 1, 2022

Brazil: Petrobas CEO removed amid rising fuel prices.
Decisions, decisions:

  • DVN: P/E = 14; yield = 6.61%; fell over 2% yesterday;
  • NVDA: P/E = 71; yield = 0.06%; fell 4% yesterday;
  • APA: P/E = 16; yield = 1.2%; rose slightly yesterday;

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

Previously posted, earlier this morning:

SPR:

  • 410 - 180 = 230 / 410 = six months from now, all things being equal, the SPR could be about half what it is now
  • all things being equal, wouldn't that suggest, WTI will be priced higher in the future
  • all things being equal, isn't an SPR release a win-win for everyone? 
  • although not designed for that purpose, could "manipulating" the SPR, minimize oil price volatility?
  • are we now in the normal state: contango? not quite yet? Futures.

Updating A Few Wells That Came Off Confidential List 2Q18; Also The Anna Wells

33813, 1,595, Petro-Hunt, USA 153-95-23D-14-2H, t7/18; cum 548K 11/20; off line 12/20; remains off line 3/21; back on line 5/21; cum 597K 1/22;

31492, SI/NC-->F/A, Petro-Hunt, USA 153-95-1A-7-5H, Charlson, producing nicely;  first production, 12/19; t--; cum 213K 3/21; back on line 12/21; cum 284K 1/22;

32809, IA/IAW/1,086, CLR, Oakdale 10-13H1, Jim Creek, a nice well; Three Forks B2; four sections; 63 stages; 14.1 million lbs;  t1/18; cum 27K after 39 days; cum 216K 2/19; off line 2/19; remains off line 2/22; 

33130, 1,220, Oasis, Peregrine 5401 42-24H, Todd, 50 stages; 10.1 million lbs; mesh/large/ceramic, a huge well; on the south side of the tracks on the south side of Williston; t10/17; cum 533K 3/21; cum 569K 2/22; 

32141, AL/A, Berenergy, Borstad 30-4, Chatfield, a Madison well, stimulated formation: Wayne; t10/17; cum 21K 12/18; cum 48K 3/21; cum 56K 1/22;

29562, 230, Foundation Energy, Lardy 44-6, a wildcat, producing nicely, southwest corner of the state; about 50 miles due west of Dickinson; a Red River well; t12/17; cum 81K 3/21; cum 91K 2/22;

*******************************
The Anna Wells

The wells:

  • 30157, 2,057, CLR, Anna 5-34H, Last Chance, API: 33-105-03914, t7/17; cum 269K 4/21; holding up well; producing 15,000 bbls in 10/17; produced 9,000 bbls in 5/18; produced 3,000 bbls in 7/19 but on line only 24 days; full 30 days in 9/19, 4,400 bbls; (up m/m); holding steady, 10/19; cum 290K 3/22; cum 303K 10/22;
  • 30156, 1,194, CLR, Anna 4-34H1, Last Chance, t8/17; cum 146K 4/21; production falling; API: 33-105-03913, producing 14,000 bbls in 10/17; produced 8,000 bbls in 1/18; produced 2,000 bbls in 12/18; 9/19; now at 2,300 bbls/month; huge jump m/m, 9/19; holding steady, 10/19; cum 155K 3/22; cum 158K 10/22;
  • 30155, 1,306, CLR, Anna 3-34H, Last Chance, t7/17; cum 145K 4/21; production falling; API: 33-105-03912, producing 14,000 bbls in 10/17; produced 2,000 bbls in 3/18; produced 2,500 bbls in 12/18; only 1,000 bbls in 7/19; only 14 days in 9/19; down to 370 bbls/month; huge drop m/m, 9/19; huge jump in production, 10/19; cum 153K 3/22; cum 158K 7/22;
  • 30154, 1,320, CLR, Anna 2-34H, Last Chance, API: 33-105-03911, t7/17; cum 181K 4/21; production holding up; producing 10,000 bbls in 10/17; produced 7,000 bbls in 3/18; produced 2,500 bbls in 12/18; only 5 days in 9/19; down to 370 bbls/month; huge drop m/m, 9/19; huge jump in production, m/m, 10/19; cum 188K 3/22; cum 190K 7/22;
  • 32969, 1,391, CLR, Anna 9-34H1, Last Chance,  API: 33-105-04292, t8/17; cum 157K 4/21; production falling; producing 16,000 bbls in 10/17; produced 8,500 bbls in 4/18; producing only 400 bbls in 12/18; and only produced for 16 days in 3/19; produced only 145 bbls in 6/19; this one could be the first to go inactive; back to 1,000 bbls in 9/19; at 1,400 bbls, 10/19; cum 168K 3/22; cum 173K 7/22;
  • 32968, 920, CLR, Anna 8-34H1, Last Chance, API: 33-105-04291, t9/17; cum 143K 4/21; okay; producing 15,000 bbls in 10/17; producing 5,700 bbls in 5/18; produced only 900 bbls in 12/18; production back to 1,000 bbls over 23 days; 9/19; off line, 10/19; back on line; cum 154K 3/22; cum 156K 7/22;
  • 32967, 1,104, Anna 7-34H, Last Chance, t7/17; cum 174K 10/20; maybe improving (5/19); API: 33-105-04290; producing 20,000 bbls in 10/17; produced 8,000 bbls in 3/18 (only 21 days); produced only 700 bbls in 12/18 and on-line for the entire month; at 2,500 bbls/month, 9/19; now down again, 10/19; off line 11/20; remains off line 4/21; back on line; cum 187K 3/22; cum 191K 7/22;
  • 32966, 1,391, CLR, Anna 6-34H1, Last Chance, t8/17; cum 162K 4/21; production improving nicely (5/19); API: 33-105-04289; producing13,000 bbls in 10/17; produced 6,400 bbls in 4/18; produced 3,000 bbls in 12/18; produced almost 5,000 bbls in 6/19; around 3,500 bbls in 7/19; huge drop, down to 340 bbls over 30 days, 9/19; 800 bbls, 10/19; cum 167K 3/22; cum 167K 7/22;
  • 23279, 767, CLR, Anna 1-27H, t11/12; cum 406K 3/22; cum 412K 7/22;

Two Wells Coming Off Confidential List; RBN Weighs In On SPR Release -- April 1, 2022

SPR:

  • 410- 180 = 230 / 410 = six months from now, all things being equal, the SPR could be about half what it is now
  • all things being equal, wouldn't that suggest, WTI will be priced higher in the future
  • all things being equal, isn't an SPR release a win-win for everyone? 
  • although not designed for that purpose, could "manipulating" the SPR, minimize oil price volatility?
  • are we now in the normal state: contango? not quite yet? Futures.

High road: I know none of the issues on this one, but for the headline, the Dems hold the high road. If there's a wedge issue for me, this would be it.

  • Vote:
    • 232 - 193, along party lines
      • all Dems were in favor; just 12 Republicans
    • the vote should have been 435 - 0

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

Active rigs:

$100.00
4/1/202204/01/202104/01/202004/01/201904/01/2018
Active Rigs3313436560

Friday, April 1, 2022: 2 for the month, 2 for the quarter, 161 for the year

  • 38546, conf, Ovintiv, Wisness State 152-96-16-21-5H, Westberg, no production daa,
  • 36100, conf, CLR, Gordon Federal 8-5H1, Haystack Butte, first production 10/21; nice well;

RBN Energy: the real-life impacts of the planned crude oil releases from the SPR. Archived.

At first glance, it would appear that President Biden’s announcement regarding the release of up to 180 MMbbl of crude oil from the Strategic Petroleum Reserve over the next six months could have a significant impact. After all, it would, in a sense, increase the flow of U.S. oil into the market by almost 9% –– 11.7 MMb/d of current U.S. production plus an incremental 1 MMb/d from the SPR — and boost global supply by about 1%, which is no small thing. 
There are a few unknowns, though, such as (1) how much sweet crude oil and how much sour will be released, (2) where the pipelines connected to the four SPR sites could take that oil, (3) whether those pipelines have sufficient capacity to absorb the incremental flows out of SPR, and (4) what the ultimate market impacts of the SPR releases will be. 
In today’s RBN blog, we look at the president’s announcement and its implications.

Data points from the essay:

  • because of increased utilization of pipelines and marine terminals along the Gulf Coast in recent years — and a few pipeline reversals — it has become more difficult to move large volumes of SPR-stockpiled crude without disrupting the existing flow of domestic production and Canadian imports.
  • how much of each type of crude oil (sweet or sour) will be released
  • the biggest risk the Dems have on this one: one month prior to the mid-term elections, the SPR will be at record lows. SPR storage is great for minimizing price hikes during natural disasters such as hurricanes. One month prior to the mid-terms, US is at max hurricane season.  
  • a significant hurricane hitting TX / LA in October, and look for a huge spike in the price of gasolien just before folks start to vote.