Halo Effect -- #16317 -- August 8, 2022

This is exactly what analysts are missing about the Bakken. No one else talks about this. 

Here's another example.

This DUC was reported as completed, August 8, 2022:

• 34817, 1,169, XTO, Myrna 21X-2B, Alkali Creek,

This Myrna well and its sister wells on the same pad hit the following well "almost perpendicularly":

• 16317. 278, XTO, Marmon Hahn Trust 11X-11, Alkali Creek, t9/07; cum 329K 6/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	29	19571	19633	7813	29357	28567	618
BAKKEN	5-2022	27	20074	20012	7445	30110	26984	2966
BAKKEN	4-2022	24	19484	19917	12768	29701	16815	12756
BAKKEN	3-2022	2	416	0	125	1019	37	977
BAKKEN	2-2022	0	0	0	0	0	0	0
BAKKEN	1-2022	0	0	0	0	0	0	0
BAKKEN	12-2021	0	0	0	0	0	0	0
BAKKEN	11-2021	0	0	0	0	0	0	0
BAKKEN	10-2021	0	0	0	0	0	0	0
BAKKEN	9-2021	0	0	0	0	0	0	0
BAKKEN	8-2021	30	795	889	897	2423	2266	0
BAKKEN	7-2021	31	1248	1089	1228	3693	3502	0
BAKKEN	6-2021	30	1685	2153	1416	4132	2576	1371
BAKKEN	5-2021	15	738	227	448	1806	775	956
BAKKEN	4-2021	1	0	0	0	4	4	0
BAKKEN	3-2021	19	313	659	43	788	517	113
BAKKEN	2-2021	28	863	655	290	2111	1250	607

 Original production when it was first drilled back in 2007: 

BAKKEN	8-2008	21	2462	2454	227	3867	3779	0
BAKKEN	7-2008	31	3142	2698	454	5127	5009	0
BAKKEN	6-2008	30	3177	3109	434	5009	4892	0
BAKKEN	5-2008	31	3584	3831	575	5866	5730	0
BAKKEN	4-2008	30	3713	3347	578	5605	5467	0
BAKKEN	3-2008	29	4021	4138	1140	6634	6466	0
BAKKEN	2-2008	29	4039	4098	560	5680	5532	0
BAKKEN	1-2008	31	4883	4659	808	6814	6631	0
BAKKEN	12-2007	31	4876	4861	724	6631	5493	958
BAKKEN	11-2007	30	5307	5609	985	7217	0	7013
BAKKEN	10-2007	31	6847	6737	2184	9312	0	9018
BAKKEN	9-2007	17	1386	1003	2040	1885	0	1783
BAKKEN	8-2007	4	382	235	52	458	0	442

Two things:

• one: production of that old well jumped 20-fold, from 1,000 bbls/month to 20,000 bbls/month:
• two: the old well was a pretty lousy well from the beginning -- see monthly production when it was first drilled back in 2007 -- around 4,000 bbls/month at the very beginning and then the dreaded Bakken decline, but now, fourteen year later, production jumps five-fold after newer wells in the area are drilled.

I used to track all these "halo" wells at this post, but it's become overwhelming. I tag them but I won't add them to thee index at that linked site any more. But I'm no less excited when I see these wells.

The map:

Sinclair With One New Permit; Eleven Permits Renewed; One DUC Reported As Completed -- August 8, 2022

WTI: $90.55.

Natural gas: $7.674.

Active rigs: 48

One new permit, #39142:

• Operator: Sinclair
• Field: Little Knife (Dunn County)
• Comment: 
• Sinclair has a permit for a Hovden Federal well in NNEENE 29-146-97; 
• to be sited 1141 FNL and 886 FEL

Eleven permits renewed:

• Enerplus (7): four Fort Berthold permits; a Tempo permit; an Octave permit; and, a Cadence permit, all in Dunn County
• Grayson Mill (2): two Martin permits; Williams County;
• XTO (2): one Michael State Federal permit and one Bjarne Federal permit, both in Williams County

One producing well (a DUC) reported as completed:

• 34817, 1,169, XTO, Myrna 21X-2B, Alkali Creek, check out #16317.
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	22	18575	18310	28096	29392	28244	490
BAKKEN	5-2022	0	0	0	0	0	0	0
BAKKEN	4-2022	0	0	0	0	0	0	0
BAKKEN	3-2022	0	0	28	0	0	0	0
BAKKEN	2-2022	2	245	217	3331	368	0	36

For The Archives -- Great Barrier Reef -- Australia -- August 8, 2022

For the archives.

WTI Continues Downward Trajectory -- Two Wells Coming Off Confidential List -- August 8, 2022

Inflation: without question, a lot of retailers are using the "cover" of inflation to raise prices. And many of these places are raising prices significantly to make up for losses during Covid-19 lockdowns. Link here. I have not noticed much change in prices at McDonald's -- all sizes of soft drinks are unchanged: $1.00.

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Back to the Bakken

Far Side: link here.

WTI: $88.10.

Natural gas: $7.800.

Active rigs: 49.

Tuesday, August 9, 2022: 6 for the month, 37 for the quarter, 376 for the year

• 37925, conf, BR, Lone Beaver 1-1-17MTFH,

Monday, August 8, 2022: 5 for the month, 36 for the quarter, 375 for the year

• None.

Sunday, August 7, 2022: 5 for the month, 36 for the quarter, 375 for the year

• None.

Saturday, August 6, 2022: 5 for the month, 36 for the quarter, 375 for the year

• 37205, conf, Grayson Mill, Larsen 10-2 XE 1H, 

RBN Energy: is the Gulf of Mexico poised for a runn of crude oil production growth?

The Gulf of Mexico (GOM) has seen more than its share of stormy weather, and — both literally and figuratively — so have crude oil producers active there. Earlier this century, production growth in the offshore GOM was set back by Katrina and other major hurricanes, then by the Deepwater Horizon spill.

Starting in 2014, and for five years after that, the Gulf's output ratcheted up, only to be set back again, this time by the double-whammy of COVID and bad storms. 

Now, the GOM appears to be poised for another period of steady growth — the only question is, with the global push to decarbonize, and with at least of couple of large producers planning to exit the region, will this be Gulf producers' last stretch of good weather? In today's RBN blog, we begin a short series on the ups and downs of GOM production, the new projects starting up this year and beyond, and the Gulf's longer-term prospects.

A Tough Investing Quarter For Everyone -- August 7, 2022

Analysis: Forbes. Link here.

Berkshire Hathaway (BRK-A / BRK-B) slipped to a loss of over $43.7 billion in the second quarter versus a profit of over $28 billion in the same quarter of 2021. 

Thanks to sharp declines in the stock market, that result is dominated by losses from the investment portfolio since unrealized gains from their portfolio are included in earnings. 

Operating earnings, which remove the distortion from market changes and better reflect the firm’s earnings power, for the quarter rose sharply by 39% versus 2021. 

Year-to-date operating earnings rose by 19% over the same period in 2021. Providing an illustration of the value from share repurchases, per-share operating income for the second quarter increased by 43% versus 2021.

Because the Covid-19 pandemic negatively impacted most businesses, including Berkshire, in early 2020, comparing current results to pre-pandemic 2019 results is helpful. Operating earnings for the second quarter of 2022 are 51% above 2019. And thanks to share repurchases, operating earnings per share are a whopping 68% above 2019.

But, bought on the dip: 

Berkshire was a net buyer of equities in 2Q by $3.8 billion, or $45.2 billion in 2022, vs. a $16 billion net seller in 2020-21. 

We think this may continue and doesn’t necessarily signal Buffett is bearish on his own shares; buybacks have historically been a lower priority use of capital. Repurchases of $1 billion in 2Q declined from the 2021 pace of about $7 billion a quarter.”

Berkshire Hathaway's 2Q22 earnings, link here:

• The conglomerate’s operating earnings totaled $9.283 billion in the second quarter of 2022, marking a 38.8% increase from a year ago.
• However, the company posted a $53 billion loss on its investments during the quarter.
• Warren Buffett again asked investors to not focus on the quarterly fluctuations in its equity investments.

The conglomerate’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — totaled $9.283 billion in the second quarter of 2022, Berkshire reported Saturday morning. It marked a 38.8% increase from the same quarter a year ago.

Let's see: that would be:

• BNI

Gasoline Demand -- Commentary -- August 7, 2022

Note: this whole "gasoline demand" fascinated me. I learned a lot from it. Some folks are suggesting the EIA is "fudging" the "gasoline demand" figures. See ZeroHedge, August 4, 2022.

Folks are working too hard / over-thinking what's going. Once one realizes who's measuring what, it all makes sense. No conspiracy theories. Simply cash flow.

This page is simply for my benefit and for the archives.

Alex Kimani: 

While Gasbuddy claims there was a 2% rise in gasoline demand last week, the EIA reported a 7.6% drop in demand.

Comment: they can both be correct; GasBuddy and EIA measuring two different things.

 Updates

August 7, 2022: link here. 

• WTI oil prices have given up nearly all their gains since Russia invaded Ukraine, falling roughly 9.5% over the course of the week amid fears oil demand is collapsing.
• Some oil pundits are now claiming that the Biden administration has been fabricating low gasoline demand data in order to drag prices lower (there are folks pushing the "conspiracy theory"; I don't buy it; I don't buy a "conspiracy" explanation).
• While Gasbuddy claims there was a 2% rise in gasoline demand last week, the EIA reported a 7.6% drop in demand (they can both be correct; GasBuddy and EIA measuring two different things)
  
• I like Alex Kimani but he missed the target on this on, on a number of levels. 
• I was disappointed there was really no analysis; no number-crunching to try to explain things
• look at the weekly data, million bbls/day
  
• 7/15/22: 8.541
  
• 7/22/22: 9.245
  
• 7/29/22: 8.521 (w/w= minus 7.8%; y/y = -12.8% 
• one year ago, 7/31/21: 9.775
  

In the graphic above,

• EIA measures gasoline demand at "B":
• GasBuddy measures gasoline demand at "A."

The question is why the disparity. A little thinking will explain "the disconnect." 

Original Post 

We'll talk about this again later.

The interesting thing: nothing supports the suggestion that gasoline demand has fallen that much, except the price of gasoline and crude oil have both come down significantly in just the past few days. Although it's hard to say gasoline at $4.25 "has come down significantly."

Suggestion regarding previous post. As a reminder:

US gasoline demand.

With new annotation:

Suggestion:

• Measuring apples and oranges.
  

Original Post

Gasoline demand: link here.  

• then explain:
• gasoline under $4.00 / gallon and dropping fast;
• WTI below $90 and dropping fast;
• US refiners operating at a very low capacity; trending toward 90% of their operating capacity; lowest in the last few years;

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For The Archives

Road trip.

Currently I am on the road: my notes will be less frequent, perhaps shorter. I will not get to my e-mail as often and I will not be able to post comments as often or in a timely manner.