What A Nice Surprise -- Despite The Three-Day Weekend, "Focus On Fracking" Has A New Edition -- May 29, 2022

May 29, 2022: link here. The lede:

• natural gas price hit 13½ year high; SPR at a 34½ year low; refinery use highest since 2019; first rig drop in 31 weeks 
• natural gas prices hit 13½ year high after a six-fold increase in less than 2 years; 
• US oil exports at a 26 month high even with SPR at a 34½ year low & US oil supplies at a 17 year low; 
• total oil + products inventories at a new 13½ year low even with highest refinery utilization rate since 2019 & greatest refinery throughput in 11 months; 
• rigs down first time in 31 weeks

Will The Fed Pivot? Some Think So. WTI At $116 -- May 29, 2022

Earlier today I mentioned the four stories I am most interested in right now. The first of the four:

1. Whether the Fed wants to be responsible for pushing the US into recession, whether it deserves that blame or not? Will the Fed back off on all that scary language about raising rates as much as it takes?

Look at this, the tea leaves suggest the Fed may pause. In the screenshot below the phrase "risk is the asset to own" suggests the NASDAQ, semiconductors, and meme-stocks may be back in favor.

Here's the screenshot:

When you go to the links, click on the "show this thread" to get more of the discussion. 

It's an incredibly long discussion, so let's cut to the chase, the writer's / analyst's summary:

Hope springs eternal.

Energy? From social media or go direct to Reuters:

Tonight, oil:

• Brent: up 0.5%; up 61 cents; trading at $120
• WTI: up 0.8%; up 93 cents (which is almost a buck); trading at $116.

The James Wells, Poe Oil Field, Zavanna

The James wells to date:

• 37100, conf, Zavanna, James 3-10 5H, Poe, first production, 12/21; t-- ; cum 120K 3/22;
• 37099, conf, Zavanna, James 3-10 4H, Poe, first production, 12/21; t--; cum 100K 3/22;
• 37098, conf, Zavanna, James 3-10 2H, Poe, first production, 12/21; t--; cum 140K 3/22;
  

37098:

Date	Oil Runs	MCF Sold
3-2022	28787	42233
2-2022	29429	44437
1-2022	44838	44785
12-2021	35942	28193
11-2021	0	121

37099:

Date	Oil Runs	MCF Sold
3-2022	26339	69628
2-2022	24101	48414
1-2022	23190	24868
12-2021	22751	19179
11-2021	0	148

37100:

Date	Oil Runs	MCF Sold
3-2022	27157	76426
2-2022	28342	53877
1-2022	29169	29199
12-2021	31957	24184
11-2021	0	295

Flashback (2017): Tellurian Acquires Haynesville Acreage, Production, And Midstream Assets -- May 29, 2022

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

This is a particularly long note: there will be content and typographical errors. If this is important to you, go to the source.

Everybody already knows this. I'm posting this for my benefit. 

This was back in November, 2017, four and a half  years ago.

Link here. 

• buyer: a wholly-owned subsidiary of Tellurian
• seller: Rockcliff Energy Operating LLC
• northern Louisiana
• $85 million
• four million cubic feet per day
• = 21x flowing cubic feet per day
• 1.3 Tcf of gas resource
• 138 drilling locations
• estimated cost to deliver: $2.25 / mmBtus
• 100% held by production
• 92% operated
• allows Tellurian to control pace of development

I posted that so I had something compare with XOM's sale of Barnett assets in north Texas, May 20, 2022. Link here.

• buyer: BKV Corp
• Denver-based; majority owned by Thai energy firmm Banpu PCL
• BKV, formed in 2015 by Thailand’s Banpu Kalnin Ventures, recently reported gross natural gas production of 550,000 Mcf/d from the Barnett. In Pennsylvania, BKV holds 50,000 gross acres across the Marcellus Shale, with around 150,000 Mcf/d gross production.
• largest natural gas producer in the Barnett shale
• seller: XOM; non-operated gas assets; (XTO?)
• north Texas
• $750 million
• details
• 160,000 net acres: Tarrant (Ft Worth), Johnson, and Parker counties
• $5,000 / acre
• working interest, 93% in over 2,100 wells
• 750 miles of gathering pipelines, and other infrastructure
• other details
• BKV has been scooping up Lower 48 natural gas assets in recent years, primarily in the Barnett. Devon Energy Corp. sold its Barnett properties to BKV in 2020. Devon had made its Lower 48 unconventional name in the Barnett after taking over Mitchell Energy & Development Corp.
• XOM's Barnett, details:
• 954 million cfd (plus oil and condensate) at peak
• the Barnett Shale (ExxonMobil Corporation) TX unconventional gas field recovered 33.91% of its total recoverable reserves, with peak production expected in 2030. The peak production will approximately 0.31 thousand bpd of crude oil and condensate, 954 Mmcfd of natural gas and 0.13 thousand bpd of natural gas liquids. Based on economic assumptions, production will continue until the field reaches its economic limit in 2050. 
• the field is expected to recover 892.28 Mmboe, comprised of 2.64 Mmbbl of crude oil & condensate, 5,331.27 bcf of natural gas reserves and 1.09 Mmbbl of natural gas liquid reserves. Barnett Shale (ExxonMobil Corporation) TX unconventional gas field reserves accounts 0.76% of total remaining reserves of producing unconventional gas fields globally.

Twitter: Don't Expect President Biden To Affect Garsoline Prices -- There Is No Plan B -- May 29, 2022

Once he Keystoned American consumers, the writing was on the wall: record high gasoline prices and no way to lower them.

It still blows me away that Americans think the high cost of oil is due to Putin's War. LOL. Ukraine is not known for refining oil.

Link here to twitter. 

President Biden is scrambling to lower gas prices ahead of the midterm elections, but he has few tools to do so. US gas prices have hit records, and the strategic petroleum release won't be able to bring them down. "There are very few tools the US administration has because the biggest driver for gasoline prices are driven by global fundamentals," a top analyst told Market Insider.

An 11-part tweet. Well worth the read, if nothing else to see the photos. The 11-part tweet never once mentions the Keystone XL, the defining moment of the Biden administration with regard to energy.

The sixes and sevens of the Biden administration on US energy.  

The "Dry Hole" Reported By Oasis On May 26, 2022 -- May 29, 2022

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

This is a particularly long note: there will be content and typographical errors. If this is important to you, go to the source.

You all may remember this item from the daily activity report dated May 26, 2022.

One dry hole:

• 34109, dry, Oasis, Fraser Federal 5300 11-35 3B, Williams County.

A reader asked me about this and I provided my thoughts (which I posted elsewhere).

I said I would get back to it after the file report was available. 

The NDIC oil and gas website is still in the process of being brought back up. I do not know what data is current and what data is still old. 

However, I am now able to access scout tickets and file reports. 

The scout ticket and the file report were interesting for a number of reasons. Again, because the NDIC oil and gas website is still in the process of being brought back on line, I am not sure the data is current. 

1. The scout ticket is likely to be current, but it's possible it is not. I'll post a screenshot elsewhere, later. 

• even though the daily activity report says the well was "dry," the scout ticket says the well is still on drl/drl status -- no suggestion that it is dry
• second, the file number, of course, stays the same but well name has changed
• original name: Fraser Federal 5300 11-35 5T:
• current well name: Fraser Federal 5300 11-35 3B.

2. The file report has no recent data. The file report's most recent information is dated from the year 2019; the well was spud 12/21/ 2019. No information on the actual drilling.

3. Most interesting: several pages of the most recently scanned documents in the file report had to do with cement casing. The prime reason for dry holes in the Bakken: collapsed cement casing before the well is completed resulting in a plugged and abandoned (a dry) well.

4. But this is particularly interesting. Remember: once a file number is assigned, that file number does not change, but the name of the well can change.

• note above, the original name and the current name.
• the file report shows the original name for this well on the application: 

• Fraser Federal 5300 11-35 5T. Target: Three Forks B1. 
• the bottom hole location: 1486 FNL and 104 FWL SWNW 33-153-100.

5. October 5, 2018: the permit was renewed. There were no changes to the original drill plan.

6. Undated: the October 5, 2018, sundry form had a pen and ink change. The name of the well was typed as Fraser Federal 5300 11-35 5B, but the pen and ink lined out 3B and changed to 5T in hand printing. The "standard planning report," dated March 28, 2018, was for "Fraser Federal 5300 11-35 5B. 

7. Then on a sundry form received by the NDIC on June 25, 2018, Oasis referred to the well as:

• Fraser Federal 5300 11-35 5T, typed in as the well name.
• the sundry form was to request a revision of existing well plans to update the bottom hole location.
• the new bottom hole location: 1084 FNL & 150 FWL lot 1 section 33-153-100 (previously 1486 FNL & 104 FWL SWNW section 33-153-100). 
• undated, there was a pen and ink change, to change 150 FWL to 154 FWL.
• TD changed from 21679' MD / 10785' TVD to 21509; MD / 10723' TVD.
• The target was changed from Three Forks to Bakken (presumably, middle Bakken).

8. In another sundry form received the same day, June 25, 2018, Oasis requested a name change:

• from Fraser Federal 5300 11-35 5T to Fraser Federal 5300 11-35 5B. 
• the surface location: 827 FNL and 541 FWL NWNW 35-153-100 (same as the current scout ticket).

9. The permit was renewed October 2, 2019. A new standard planning report, dated October 2, 2019, was submitted.

10. Then, on October 16, 2019, another sundry form was received. Oasis requested yet another change, and this was as important as the earlier change in formation target. 

• the new bottom hole would be moved to 550 FNL & 150 FWL (pen and ink change, undated, to 174 FWL) section 33-153-100 from 1084 FNL & 150 FWL section 33-153-100.

11. That same date, October 16, 2019, another sundry form was received. Now, Oasis requested a name change:

• from Fraser Federal 5300 11-35 5B to Fraser Federal 5300 11-35 3B.

12. A new geographic survey report, dated March 13, 2020, was published, reflecting the new name, the new bottom hole location, and the new depths. A new Standard Survey Report, March 13, 2020, was published the same day.

That brings the file report up to date.

This does not necessarily explain why the well was reported as "dry" in the recent daily activity report; that scout ticket still shows it in drl/drl status. It's my experience that results of well (dry or not dry) reflect the file number of the well (which is also the permit number) and not the the name of the well which can be changed.

As noted, the scout ticket reports the well to have been spud 12/21/2019, but after all the changes above, it would not surprise me a bit if the big rig never drilled the well to depth, and thus a dry well. More likely, it is simply a "paperwork - computer" interface issue and the well will be productive.

Perhaps the surface owner and/or others know the rest of the story but that's where things stand now based on the file report. 

Memorial Day Sunday -- May 29, 2022

I'll come back to these later, perhaps. It's going to be a busy Sunday for me with family commitments.

These are the four stories I'm most interested in right now and at least two of the stories are gaining traction on my twitter feed.

1. Whether the Fed wants to be responsible for pushing the US into recession, whether it deserves that blame or not? Will the Fed back off on all that scary language about raising rates as much as it takes?

2. Whether inflation has peaked, and long with it, the price of gasoline? Even the most bullish are now concerned that the increase in gasoline demand is not developing as fast as predicted. We'll know more after Memorial Day data is released. On a side note, everyone knows, inflation-adjusted, gasoline is less expensive now than it was in 2008 and of all the things Americans buy, gasoline is still a relative bargain.

3. Whether the price of oil will ever reflect the crack spread? With regard to "oil" and "gasoline" prices, it's now all about refining. Everybody seems to have noticed that in the past week.

4. Whether the supply chain shortage is over? The supply chain shortages are now a thing of the past except for EVs, ICEs, semiconductor chips, and baby formula. Two weeks ago we were shopping in Belk's, a very, very nice upscale discount store: think Target without the groceries and clothing generally 50% off at Belks, shoes off 20% - 40%, and everything else similarly discounted, perhaps not as much. 

Two weeks ago, my wife actually left Belks soon after entering, deciding not to shop because the store was overflowing with merchandise. 

She couldn't deal with that amount of merchandise. 

I went back with her and even I was impressed (and bought a few things, at 55% discount, including a new Hawaiian shirt). I mentioned this to the cashier. She said she had worked many years at Belk's and had never seen her store so well stocked. She said they had 60% more inventory on the floor for this time of year than is normal.

5. Speaking of baby formula. The US is the only western nation with a baby formula shortage. 

Exhibit A: Mexican store shelves are completely stocked with baby formula; Americans see  it in Tijuana pharmacies. But apparently it's illegal to bring baby formula into the US from Mexico. Though the US government can fly it in from the Netherlands. Later: folks are allowed to bring formula in to the US from Mexico for personal use only. Formula must be declared at the and US Customs officials will determine -- on the spot -- at their discretion -- if everything is okay. Thank you to a reader for sending me a link to a story clarifying that point. Baby formula must be incredibly lucrative for the major suppliers of US baby formula to have that much control over Congress with regard to baby formula.

6. Back to the supply chain shortage story. Based on snippets from my twitter feed, China is opening back up. First, Shanghai is getting back to normal; and, second, it appears that Beijing is not going into as severe a lock down as anticipated and is, it appears, also getting back to normal. If these stories are accurate ... 

*****************************
Meanwhile, Over At Target

On the grocery side of Target, locally they are doing much, much better, but there are spot shortages. It would be comparing apples with oranges, to compare Belks (no groceries) with Target groceries, but compared to the regional grocery store we shop at, it certainly appears Target had its own specific logistics problems.

Later: today, Sunday, May 29, 2022 -- now that I'm working out three times / day -- three one-hour work-outs -- one-hour treadmill; one-hour bike ride; and, one-hour swimming -- I'm washing clothes much more often. I went to Target to pick up Hanes, Fruit of the Loom, or George underwear. Target was completely sold out, or nearly if not completely. I got on my bike and rode to Walmart. Their shelves were literally over flowing with Hanes and George; and, enough Fruit of the Loom. 

******************************
Speaking Of Logistics

Yesterday morning I ordered a book from Amazon after reading the review about 6:30 a.m. in  The WSJ. 

Amazon delivered the book at 6:30 p.m. last night. Their window of delivery had been projected between 5:00 p.m. and 10:00 p.m.

Oh, by the way, all that talk about high fuel costs for Amazon. LOL. One doesn't think the USPS, UPS, and Fed Ex don't have the same problems?

**********************
The CDC Is Shut Down
Over The Three-Day Weekend

I track the CDC Covid-vaccine daily report, religiously, "never" missing a day. 

The Friday report was posted, but the Saturday report was not, and my hunch is that neither the Sunday (today) or Monday (tomorrow) report will be published either. The Tuesday report will likely be reported late and I will have to "interpolate" the data for the three day weekend. 

***********************************
Meanwhile, Over At Fox News

Primaries: apparently Trump got trounced in Georgia and may lose in Pennsylvania. Had the three elections gone the other way, the Georgia story would have been a headline story for Fox News but after the very, very embarrassing results, the story is (relatively) buried. One can easily find it but it's not prominent.

Memorial Day, again from Fox News, two different stories.

Embattled liberal DA tweeted the importance of "remembering" those who served. For Fox News this is a huge story and has been running the story for a couple of days now.

Lee Greenwood, a stud for both Fox News and Trump tweeted the importance of "remembering" those who served and buried the story. Again, it's easily found but unfortunately it couldn't be the headline story the media giant had probably hoped.

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

I'm finishing one book on the bohemians, 1910 - 1960, Greenwich Village, New York, and Provincetown, Cape Cod, Massachusetts, and will begin a similar book, I think, on Hollywood in the 1960s. Can hardly wait.