Uff-Da -- We’re Seeing Some Big Forecasts Here -- July 21, 2022

Link here.

U.S. fuel makers are poised to generate historic levels of cash from refining oil into gasoline and other products after fuel prices have surged nationwide.

Valero Energy Corp.,  Marathon Petroleum Corp. and Phillips 66, the largest three independent refiners, are set to collectively bring in about $14 billion in cash from operations this quarter, analysts estimate, the highest combined level on record.

The huge cash flows from their core business will translate into gargantuan profits as the companies report their results beginning next week. Investment bank Tudor Pickering Holt & Co. expects the largest eight independent refiners will report a 652% jump in earnings per share, on average, compared with the first quarter of the year, allowing some of these companies to log their highest returns in years.

Exxon Mobil Corp. this month said its fuel-making profits could climb up to about $4.4 billion in the second quarter, compared with an average of $853 million in the same periods from 2017 to 2019. That was the largest single factor in the company’s forecast that earnings could be as high as about $18 billion, which would be its most lucrative quarter in at least 25 years.

“We’re seeing margins twice as high as the golden age,” said Charles Kemp, a vice president at energy consulting firm Baker & O’Brien Inc., referring to a period of record profit levels for refiners from 2004 to 2007. 

Refiners back then benefited from a supply gap that emerged in part because they had virtually stopped building refineries since the last significant, new U.S. refinery was constructed in the 1970s.

NDIC GIS Map Server -- Very, Very Nice -- July 21, 2022

I've only played with the new map for a short period of time, but what little I've seen I'm really impressed. And I assume as I learn more about it, I will have a better and better experience.

Small Halo Effect -- 18968 -- Enerplus Fort Berthold

The well:

• 18968, 875, Enerplus, Fort Berthold 148-95-22D-15-1H, Eagle Nest, t9/12; cum 339K 5/22; recent production profile; full production here;
  

ool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2022	31	3799	3802	1340	4567	2348	407
BAKKEN	4-2022	27	3544	3529	1176	4785	1995	332
BAKKEN	3-2022	24	2534	2534	1187	2905	1482	225
BAKKEN	2-2022	28	3442	3436	1434	4142	2390	264
BAKKEN	1-2022	31	4145	4206	1921	4673	2607	322
BAKKEN	12-2021	30	4396	4330	2320	3102	2795	307
BAKKEN	11-2021	30	4742	4740	2881	3470	3030	405
BAKKEN	10-2021	31	4399	4388	25208	3914	2785	392
BAKKEN	9-2021	2	63	63	4530	110	89	9
BAKKEN	8-2021	0	0	0	0	0	0	0
BAKKEN	7-2021	0	0	0	0	0	0	0
BAKKEN	6-2021	0	0	0	0	0	0	0
BAKKEN	5-2021	0	0	0	0	0	0	0
BAKKEN	4-2021	0	0	0	0	0	0	0
BAKKEN	3-2021	31	0	0	0	0	0	0
BAKKEN	2-2021	0	0	0	0	0	0	0
BAKKEN	1-2021	0	0	0	0	0	0	0
BAKKEN	12-2020	0	0	0	0	0	0	0
BAKKEN	11-2020	0	0	0	0	0	0	0
BAKKEN	10-2020	0	0	0	0	0	0	0
BAKKEN	9-2020	0	0	0	0	0	0	0
BAKKEN	8-2020	0	0	0	0	0	0	0
BAKKEN	7-2020	0	0	0	0	0	0	0
BAKKEN	6-2020	0	0	0	0	0	0	0
BAKKEN	5-2020	0	0	0	0	0	0	0
BAKKEN	4-2020	0	0	0	0	0	0	0
BAKKEN	3-2020	0	0	0	0	0	0	0
BAKKEN	2-2020	0	0	0	0	0	0	0
BAKKEN	1-2020	0	0	0	0	0	0	0
BAKKEN	12-2019	0	0	0	0	0	0	0
BAKKEN	11-2019	0	0	0	0	0	0	0
BAKKEN	10-2019	0	0	0	0	0	0	0
BAKKEN	9-2019	0	0	0	0	0	0	0
BAKKEN	8-2019	0	0	0	0	0	0	0
BAKKEN	7-2019	0	0	0	0	0	0	0
BAKKEN	6-2019	0	0	0	0	0	0	0
BAKKEN	5-2019	0	0	0	0	0	0	0
BAKKEN	4-2019	15	686	1106	335	1715	797	103
BAKKEN	3-2019	31	1808	1737	550	3512	1586	162
BAKKEN	2-2019	28	1707	1597	663	2417	1976	0
BAKKEN	1-2019	31	1710	1806	854	3221	2723	10
BAKKEN	12-2018	31	2024	1919	761	3153	2639	43
BAKKEN	11-2018	29	1783	1925	897	1238	780	42

One Year Ago Today -- Medical Commander In Chief -- July 21, 2022

Link here.

For Investors -- July 21, 2022

CNP: whoo-hoo! CNP raises its dividend from 17 cents to 18 cents. 

Amazon Health: acquires One Medical for $3.9 million. A big deal. Link here.

Sempra: Mexico's CFE -- jointly boost Mexican energy infrastructure projects. Link here. Shares up 0.46%; closed at $153.49. A $124-stock.

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. Full disclaimer at tabbed link.

Seven best energy stocks: link here.

• EPD:
• Pioneer Natural Resources
• NRG Energy
• Energy Transfer, LP
• Trinity Industries (TRN)
• Coterra Energy (CTRA)
• Devon (DVN)

MRO With Three New Permits -- July 21, 2022

RimRock: Devon acquisition closes. At the blog, the deal is followed here.

Devon Energy Corp. today announced that it has completed its previously announced acquisition of the leasehold interest and related assets of RimRock Oil and Gas, LP in the Williston Basin for a total cash consideration of $865 million, less purchase price adjustments.

This acquisition adds a contiguous position of 38,000 net acres (88% working interest) directly offsetting and overlapping Devon’s existing position. Production from the acquired assets is expected to increase to an average of 20,000 Boe per day over the next year. The transaction also adds more than 100 highly economic undrilled inventory locations, positioning the company’s Williston Basin assets to maintain high-margin production and strong cash flow for several years. 

Back of the envelope: $23K / mineral acre: very, very high end; $43K / flowing boe: at the upper end of deals in the Bakken,

WTI: $96.41

Natural gas: $7.902

Active rigs: 45 or thereabouts.

Three new permits, #39108 - #39110, inclusive:

• Operator: Marathon (MRO)
• Field: Bailey (Dunn County) -- my favorite field
• Comments:
• MRO has permits for three new wells, a Pugh USA and a Luhman, in Bailey County and a Schookowsky in Chimney Butte; 
• Pugh will be sited in lot 1 sectioon 18-146-94, 506 FNL and 433 FWL; 
• the other two will be sited in NENE 13-146-95, between 1087 FNL and 1099 FNL and between 338 FEL and 300 FEL

Seven permits renewed:

• XTO: seven Marmon Federal permits in Williams County;

One producing well (a DUC) reported as completed:

• 35436, 1,210, XTO, Emma 31X-30HXE,

Wow, Talk About Throwing Out The Baby With The Bath Water -- July 21, 2022

Link here.

CLR's LCU Jessie Wells -- Update -- July 21, 2022

Note: In this type of note there will be typographical and content errors. If this is important to you, go to the source.

Updates

Later, 2:35 p.m. CT: to reader. I will quit on these for the moment. If I was at the deli in Williston and this came up my narrative might go something like this:

CLR continues to  move slowly -- more slowly than planned -- to drill out the Long Creek Unit. It looks like the five Truman wells were the most recent ones to be completed, and are huge wells. It's hard to say if the wells are still off line or coming back on line after the blizzard in April. They all report production in May, 2022, but some were on line for only five days.

One of the Truman wells, #36983, was drilled to depth, went to TA status, and to date, FracFocus does not provide any data for a frack. I checked one of the other Truman wells, #36867, LCU Truman 11-23H and FracFocus does show that it was fracked end of August/early September. However, the file report shows that this last Truman well, the only one TA, #36867, was indeed fracked, at the same as the others, with 42 stages; 178,616 bbls of fluid; 10,894,791 pounds of proppant.

It's ironic that the first well I looked at was renamed and was not drilled because they found "bones" when building the pad. See original note, a Jessie well, #36751.

Of more interest, two wells, as you noted, #36960 and #36958, were dry. For one of them, #36960, the file report was not helpful, no data yet; but for #36958, LCU Reckitt Federal 11-22H, casing failed at a depth of 2,037 feet and the well was abandoned and plugged. 

Bottom line: overall, not going as well as usual with a couple of dry holes, probably both due to casing problems; a "bones" problem with one pad; and perhaps some delays due to lack of frack spreads.

Later, 2:13 p.m. CT:

• the scout tickets of all wells have been viewed;
• data for all wells on the Long Creek Unit have been updated.See link below.
• it appears CLR continues to advance slowly on this unit
• I need to check the file reports of the following wells; I've only looked at the file report for #36960
• 36983: the only well in this group of seven wells that did not go to TATD status but is on TA status; according to file report, was successfully drilled to total depth on June 30, 2021;
  
• 36960: one of two wells in the LCU that I found to have a status of dry; the file report was not helpful;
• 36958: one of two wells in the LCU that I found to have a status of dry; was spud 2/24/20; dated completed 9/15/21; driller total depth: 2,037 feet; shut in; well plugged with cement 2021-09-11; narrative: attempted to drill 8 3/4" vertical and curve on well; drilled out surface shoe at 2035' down to 2307'. Ran FIT, lost pressure. Attempted cement squeeze, pressured up after but would not hold pressure. Decided to plug well and drill in another location.
  
• appears to have had two wellbores; one reached 2,035 feet; and one reached 2,307 feet;
  
• 36751, PNC, but previously noted; nothing new;
• 36752, PNC, but previously noted; nothing new;
• 36753, PNC, but previously noted; nothing new;
• I probably won't look at the file reports of the following wells
  
• 36865, one of five wells, recently completed; big wells, taken off line 5/22;
• 36866, one of five wells, recently completed; big wells, taken off line 5/22;
• 36867, one of five wells, recently completed; big wells, taken off line 5/22;
• 36868, one of five wells, recently completed; big wells, taken off line 5/22;
• 36869, one of five wells, recently completed; big wells, taken off line 5/22;
• note: of these five wells, #36765 - #36869,  it's possibly they are coming back on line after the April blizzard.

Original Post

A reader asked about the status of the LCU Jessie wells. These wells are tracked here.

My reply: 

I will run through the wells later and see if there are any updates. I quit following a lot of wells when the NDIC GIS map server went down.

As a start, with regard to one well: this is very old news but CLR changed the name of #36751, LCU Jessie 2-24H1 (obviously a Three Forks well) to LCU Jessie 2ND -- I don't know what "ND" means but it could certainly mean "not drilled."

The file report received September 3, 2019 said:

"Continental Resources requests to cancel the approved drilling permit. The pad construction has been started but was put on hold due to the discovery of bones. Continental Resources has decided to move the location of the well to the LCU Jessie 5-12 pad location. A decision on reclamation or a landowner's release for the partially constructed pad will be done as soon as possible once the investigation is complete for the bone discovery."

So, I will run through the LCU wells and update them. I doubt I will find much more. Maybe a reader knows something. 

These wells are tracked here. It will take awhile to update the wells, and even longer to check the file reports.

The Grids -- July 21, 2022

ISO-NE

 *******************************************
ISO-NY

 *******************************************
ERCOT

LNG To France -- July 21, 2022

LNG to France: great thread and great graphics. 

 

I Assume This Needs To Be Fact-Checked -- July 21, 2022

Link here.

Why I'm Not Worried About Monkeypox -- July 21, 2022

... I don't even know Benjamin Ryan. 

Well, This Should Be Fun -- July 21, 2022

Link here to Charles Kennedy.

So, who are the top refiners and do I "own" any?

From the linked article:

France’s supermajor TotalEnergies said last week that “Refining & Chemicals results are expected to be exceptional given the very high levels of distillate and 

**************************
Inflation Watch

Tuna at 85 cents a can -- I've never seen it this low -- at least not in the last two or three years.

Eight Bar-S hot dogs: they were 99 cents last week, now up to a $1.29 but that compares with all other hot dogs at $5.99 for a package of eight.

And finally, I bought the salad expecting to pay $3.99, but found that it was on sale for $2.49.

This "food inflation" story is a bit overblown. 

By the way, eggs are now easily found; no longer any shortage. Target has a dozen for $2.29 and I'm sure they will get less expensive over the next few months.

The bacon, lettuce, and tomato sandwich I'm going to have in a few minutes will cost about fifty cents.

Make My Day -- July 21, 2022

Link here. 

ERCOT -- Again -- July 21, 2022

I don't watch network news any more -- in fact, I don't watch "networks" any more at all -- mostly just Hulu and TCM (the latter carried by Hulu) -- so I would not have seen this.

But according to the reader:

"The ladies this morning on NBC about fell over themselves when noting that Texas used more electricity that either New York state or California."

"The ladies" must be the news reader and the anchor over at NBC's morning show -- I've long forgotten the name -- oh, that's right: "The Today Show"?

In passing, apparently, it was mentioned that some of the Texas electricity demand was from industry -- a very small amount -- but it was the HEAT caused all the electricity demand. 

That would be correct. It's July in Texas. August comes next. Even the Texans complain about the heat during July and August. It happens every year.

But whether it's 100° or 105° would that really change anything? Of course, whether it's 100° or 105°, the folks would be running their air conditioning.

So what changed? Faster growth than ever expected, both residential and commercial.

Individuals are streaming in from California and to some extent from New York (most New York emigrants head to Florida on southbound I-95). Businesses are flocking to Texas. Most recently: Caterpillar.

One big "problem": cryptomining probably explains 90% of the demand problem for ERCOT.

The cost of electricity in Texas is not the issue: it will average out over the full year.

What matters in Texas is "maintaining" the grid, not the cost of maintaining the grid.

All eyes are on Texas. The East Coast and West Coast are hoping that the grid fails. They keep bringing up the winter storm in 2021 when things did freeze up. That was bad. Very bad. Won't happen again.

But comparing winter freeze with summer heat are two entirely different things. The winter freeze was catastrophic shutting down power for days (weeks in some cases) whereas if the "grid fails" in Texas in the summer it will be for an hour or so, and it will mostly handled with "brownouts" and rolling blackouts. It will be an irritant but not a catastrophe. 

In Texas, it's a DEMAND problem, not a SUPPLY problem.

In New York and New England, it's a SUPPLY problem, not a DEMAND problem. 

Yeah, it's a nuance. 

In Texas: stop cryptomining for a couple of hours and there is plenty of electricity.

In New England: building some natural gas pipelines from Pennsylvania and there will be plenty of electricity. But apparently, New Englanders prefer burning oil to meet energy demands. 

Why The "Green Movement" Gets It Wrong -- They Can't Do The Math -- July 21, 2022

Wow, wow, wow.

The same reader who sent me the link on coal use also sent me the link to a Fox piece on a Blooomberg op-ed. 

The link: https://www.foxnews.com/media/biden-must-stop-fall-gasoline-prices-set-5-gallon-minimum-combat-climate-change-bloomberg-op-ed.

Wow, this is truly amazing. This is exactly why the "green movement" gets it wrong. They can't do the math.

The "green movement" argues that higher gasoline prices will hasten the transition to renewable energy.

In fact, it appears that higher crude oil prices and higher natural gas prices have hastened the return to King Coal. 

Sweet irony. 

By the way:

• old news: Sri Lanka "fell" due to high energy prices
• new news: it looks like Panama may be next

I don't know much but I know that neither the average Sri Lanken nor the average Panamanian can afford Pete Buttigieg's $55,000 EV. New or used.

Coal Is King -- July 21, 2022

This is really quite amazing. 

I have a reader who has been predicting this ever since I started blogging: that eventually coal would "come back" despite the "green movement." 

I never knew the reader's timeline but I think we both thought in terms twenty years or so (remember: the blog is over twelve years old; fourteen years old if one goes back to the first post in 2007 -- I deleted the blog from 2007 to 2009 in a moment of insanity -- I changed the direction of the blog in 2009 and felt everything before was unnecessary). 

A digression, I apologize. I was saying.

I never knew the reader's timeline but I think we both thought in terms twenty years or so before coal made a comeback. I know I never, in a million years, expected coal to surge this soon. I was thinking maybe 2040 or thereabouts.

There are multiple reasons but I don't have time for that now.

But here's the headline, from John Kemp's column over at Reuters: global 2021 coal-fired electricity generation surges to record high. Link here. 

Global coal-fired electricity generators are producing more power than ever before in response to booming electricity demand and the surging price of gas.

The world’s coal-fired generators produced a record 10,244 terawatt-hours (TWh) in 2021 surpassing the previous record of 10,098 TWh set in 2018.

Coal-fuelled generation is on course to set an even higher record in 2022 as generators in Europe and Asia minimise the use of expensive gas following Russia’s invasion of Ukraine and U.S. and EU sanctions imposed in response.

By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have been replaced by newer and more efficient ones needing less fuel per kilowatt.

Global coal mine production was 8,173 million tonnes in 2021 compared with 8,180-8,256 million a year between 2012 and 2014.

But mine production is also likely to set a new record this year as the surging demand for coal-fuelled generation overtakes efficiency improvements.

So much more at the linked article. 

Favorite tag: Obama kills US coal industry. 

I do not believe Greta Thunberg contributed to this article.

WTI Plummets -- Back To $95 -- Two Wells Coming Off Confidential List -- July 21, 2022

Earnings season: 103 companies report earnings today, including ATT (T) before market open.

• T: down 1.54% yesterday; down 2.4% pre-market today; trading at $20.00; yields, 5.3%
• earnings:
• T added more wireless postpaid phone subscribers
• lowered its full-year free cash flow outlook
• earnings excluded WarnerMedia, spun off in early April, and DirecTV (the latter spun off to TPG Capital in August, 2021)
• EPS: 65 cents vs forecast of 61 cents (nice beat)
• revenue: $29.6 billion vs forecast of $29.5 billion (a beat is a beat, as they say)
• but look at this, holy mackerel, new postpaid wireless phone customers (these are phone additions)
  
• actual: 813,000
• forecast: 562,000
• delta: that's a 45% miss by analysts (kudos to ATT)
• in all, T added about 1.1 million more customers, of which 813,000 included a phone
  
• wireless service revenue climbed 5.2% to $19.9 billion vs estimate of $19.7 billion (a beat is a beat, as they say)

It's hitting the fan: a few weeks (or months) ago, I suggested that, with regard to global energy and geopolitical events, the sh*t would hit the fan in July, 2022. First bit of that brown stuff:

The first "other" companies: the German automotive and truck manufacturers Mercedes auto, Daimler trucks, Volkswagen/ 

Housing bubble: I know house prices are falling quickly. This is the third post in about as many days from multiple sources. I'm not sure this chart is particularly accurate but I think all agree the "sentiment" is accurate. Link here

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

Far Side: link here.

WTI: $95.17; falls almost 5%.

Natural gas: $7.658, jumps 4.4%

Active rigs: 41 or thereabouts.

Thursday, July 21, 2022: 18 for the month, 18 for the quarter, 357 for the year

• 38674, conf, CLR, Bang 7-4H1,
• 32111, conf, Slawson, Armada Federal 4-14-13TFH, 

RBN Energy: startup of western Canada's heartland petchem complex to tighten propane balances. 

Western Canada’s propane market has been rapidly evolving in the past few years. Rising Canadian demand for propane and direct exports to Asia from British Columbia’s (BC) two export terminals have been jockeying for supremacy with railed propane exports to the U.S. Those exports to Asia and the U.S. will soon be facing another challenge: the pending startup of Inter Pipeline’s Heartland Petrochemical Complex, which will increase propane demand in Western Canada by a hefty 22 Mb/d in the coming weeks. In today’s RBN blog, we look at what it could mean for propane exports to the U.S., which has traditionally depended on an assist from Canadian volumes.

The Grids: Re-Posting -- July 21, 2022

I'm re-posting this because I think it's important and because it compares and contrasts what's going on in New England and New York with what's going on in Texas.

 

By the way: the electricity demand in New England yesterday was off the charts! I think it was the highest I've seen in the many years I've been tracking ISO-NE.  One of my regular readers with regard to ISO-NE can fact-check me on this.

We all have our world views, our myths, and we all have different filters, and look at the world through different lenses.

 

From my worldview:

• Texas is doing it right; New England is not.
• Texas' problem: growing too fast; sucked into renewable energy
• New England's problem: sucked into renewable energy; no plan B
• my focus:
• New England: very expensive energy when it does not have to be expensive
• Texas: cost is not an issue; maintaining the grid is the issue
• both New England and Texas: this is exactly what the solar and wind developers were counting on
• if one pays attention to pricing structure for renewable energy, everything makes sense
  

From twitter, link here:

ISO-NE

ISO-NY 

 ERCOT

Link here.

Grid had absolutely no problem today and won't have a problem this summer.

Overnight -- July 21, 2022

Ford: Bloomberg --

• will cut 8,000 jobs to help fund EV investment
• reductions seen coming from the Ford division that is producing gas-fueled models 
  
• CEO: Ford profit hampered by having "too many people"
• boardroom
• CEO: "ICE division -- we have to cut; we need cash to fund EV development"
• head of ICE: "So, we're hitting on all cylinders; making money hand-over-fist; our people are incredible; putting out a product the US consumer wants; we're meeting / exceeding all expections; and the reward for our union members is to cut 8,000 well-paying jobs?"
• CEO: "Yes. Now, back to EV. Bill, when do you see turning a profit in EVs?"
• CEO: "Bill?"
  

Tesla: more comments over at twitter about Tesla selling bitcoin

• appears to have bought at about $33,000
• appears to have sold for about $29,000
• if accurate, did great job minimizing loss
• many think the bitcoin sale accounts for company's "free cash flow" this past quarter
• whether accurate or not, a question and an observation:
• is that why Tesla sold? Nope, Tesla sold to stop losing money; they saw where bitcoin was headed
• folks are using the phrase "free cash flow" too often; I wouldn't consider selling bitcoin "free cash floow"; it might be "cash" but it really wasn't "flow" as in continuous revenue stream from ongoing operations

Back to military medicine vs civilian medicine: link here;

************************
Maps

Great observation: Safari (Apple) maps vs Google maps. Link here.

• both "styles" have their advantages
• but having it pointed out to me, helps me decide which format to use, depending on the situation
• before arriving at airport, or before deplaning: use Safari maps for terminal location
• once having passed through security, or during layover: use Google maps to locate retail
• if I had only one choice: as much as an AAPL fanboy that I am, I think Google wins on this one;
• by the way, KPIs?
• key performance indicators or key points of interest

******************************
Recession Indicator? Gasoline Demand

This is about as muddled a graph as anyone could post, but I'm glad it was posted; link here.

******************************
Fossil: A Very Unfortunate Name For A Watch Company

First, the timeline for iPhones. 

Hunch: Rolex doing just fine. Typical customer: An LIV golfer.

******************************
The Psychology Page

Framing and nudging.

• Twitter: nudging is not effective.
• Twitter: is "framing" similar to nudging?
• Nudging: wiki entry.
• Framing: wiki entry.
• Frameworks institute.