The Million Dollar Way (The Bakken Oil Blog): 08/11/22

Thursday, August 11, 2022

What Happened To Wind, Solar? August 11, 2022

No Wells Coming Off Confidential List -- August 12, 2022

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.

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.

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.

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

The Far Side: link here.

WTI: $92.02.

Natural gas: $8.708.

No wells coming off confidential list.

RBN Energy: to understand the hydrocarbon value chain, start with the basics.

The energy industry — everything from oil and gas production and transportation to oil refining, gas processing and NGL fractionation — has a myriad of variables influenced by dozens of factors. It’s a value chain so vast you’d think it would be impossible to explain in simple terms. But behind it all is a well-oiled machine for developing the resources that literally fuel our modern economy. And, by understanding what happens at each link in the value chain, you can ultimately gain a clearer picture of what’s happening in energy markets. In today’s RBN blog, we kick off a series aimed at examining and explaining the oil and gas value chain, starting with the upstream world of exploration and production — what happens in production areas, the types of companies that operate in that segment, and the critical role of oil and gas reserves.

GS Or BS: Crude Oil Back To $130 / Gasoline Back To $5 -- August 11, 2022

Predicting oil prices is a fool's errand.

Having said that, from Goldman Sachs today, by the end of the year, 2022:

oil will hit: $130
gasoline will be back to $5

I don't agree with that prognostication, but only because the "end of the year" is December, not exactly a big driving season.

But if "we" hit $130 / $5 before the end of this year, I can only imagine how high oil / gasoline will be next summer, assuming Russian sanctions are still in place. But the election will be over, so it won't matter much. Will it?

*********************
The Apple Page

Link here.

Four New Permits; Eight Permits Renewed; WTI Trending Up -- August 11, 2022

Locator: 10020KIEFEL.

WTI: $93.99.

Natural gas: $8.709.

Active rigs: 47

Four new permits, #39157 - #39160, inclusive:

Operator: CLR (3); Resonance Exploration
Field: West Capa (Williams); South Westhope (Bottineau)
Comments:

CLR has permits for three new Kiefel wells, SESW 36-155-97;

to be sited 675 FSL and between 2290 FWL and 2380 FWL;

Resonance has a permit for a Resonance Huber well, SWSW 1-162-80, a horizontal;

to be sited 1188 FSL and 1091 FWL;

Eight permits renewed:

XTO (6): two Abby Federal permits in Dunn County; two Roberta permits; and two Lyla permits, the four in Williams County
Enerplus: one Christine Joe permit in Williams County
Liberty Resources: one Blomquist E permit in Burke County

The "Halo" Effect: CLR Gale Wells -- August 11, 2022

This well was fracked at the end of 2021:

37375, drl/NC, CLR, Gale 7-32H, Cedar Coulee, first production, 11/21; t--; cum 190K 6/22;

Two older, neighboring wells with "halo" effect:

22434, 738, CLR, Gale 2-32H, Cedar Coulee, t12/12; cum 365K 6/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	30	9421	9559	6620	12284	11893	0
BAKKEN	5-2022	30	12141	12067	8479	14985	14610	0
BAKKEN	4-2022	22	9006	8954	7207	9252	8995	0
BAKKEN	3-2022	30	14139	14080	12046	15141	13794	0
BAKKEN	2-2022	15	203	160	8	4	0	0
BAKKEN	1-2022	30	6936	7055	9229	7967	7694	0
BAKKEN	12-2021	31	14924	14868	27428	15470	14939	112
BAKKEN	11-2021	19	11336	11086	20891	11118	10928	0
BAKKEN	10-2021	1	0	0	7	0	0	0
BAKKEN	9-2021	1	0	0	6	0	0	0
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	1	33	0	5	1	0	0
BAKKEN	4-2021	9	225	280	103	285	203	0
BAKKEN	3-2021	31	1304	1352	467	1527	1108	0
BAKKEN	2-2021	28	918	904	288	1048	684	0
BAKKEN	1-2021	30	1276	1809	495	1509	1117	0
BAKKEN	12-2020	31	1399	909	540	1659	1240	0
BAKKEN	11-2020	30	1457	1538	560	1682	1267	10
BAKKEN	10-2020	31	1558	1655	605	1827	1408	0
BAKKEN	9-2020	30	1394	1613	537	1654	1249	0

22436, 1,070, CLR, Gale 3-32H, Cedar Coulee, t1/13; cum 268K 6/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	30	4117	4020	7602	5092	4788	0
BAKKEN	5-2022	30	5089	5174	10277	5611	5227	0
BAKKEN	4-2022	24	3380	3255	7923	3615	3356	0
BAKKEN	3-2022	31	7530	7616	18261	9588	8125	0
BAKKEN	2-2022	16	488	348	1550	1456	1423	0
BAKKEN	1-2022	9	94	129	1	133	130	0
BAKKEN	12-2021	26	3476	3361	4573	4076	3716	35
BAKKEN	11-2021	19	5719	5579	8206	6538	6334	0
BAKKEN	10-2021	6	0	0	8	2	0	0
BAKKEN	9-2021	0	0	0	0	0	0	0
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	10	346	536	227	412	297	0
BAKKEN	3-2021	31	1556	1557	668	1727	1308	0
BAKKEN	2-2021	28	1486	1539	543	1426	959	90
BAKKEN	1-2021	31	1618	1597	542	1255	836	0
BAKKEN	12-2020	2	9	0	3	42	0	1
BAKKEN	11-2020	1	1	0	2	0	0	0
BAKKEN	10-2020	0	0	0	0	0	0	0

The maps:

Quarterly State Land Lease Sales -- August, 2022

Done quickly; didn't proofread; there will be content and typographical errors; if this is important to you, go to the source.

Link here.

August, 2022.

Billings County:

eleven parcels
80- and 160-acre parcels
Iron Horse Royalties; Northern Energy Corp
range:
lowest: $2 / acre
highest: $180 / acre

Burke County:

twenty-eight parcels
all Northern Energy except one Lynx Oil Company
40-, 80-, and 160-acre parcels
lowest: $2 / acre
highs: $757 / acre

Divide County:

forty-one parcels;
all Northern Energy except one Norra Resources
lowest: $2
highest: $136

Dunn County:

four parcels
Beta Land Services (3) Phoenix Capital Group; Dasinger/Kaleb
lowest: $2
highest: $902 / acre for an 80-acre parcel

McKenzie County:

nine parcels
Northern Energy (5); Slawson Exploration (2); Bakken Production;
lowest: $40;
highest: $502 / acre for an 8-acre parcel;

SW4, 147-99028, Dasinger, Kaleb

McLean County:

number of parcels: too numerous to count
all bought by The Triplet T, Inc., except one parcel by Advanta Reesources
40-, 80-, and a few 160-acre parcels
all for $1 and $2 except one parcel for $5 and one parcel for $56
lowest: $1 / acre
highest: $56 / acre

Mountrail County:

number of parcels: too numerous to county
mostly The Triplet, Inc; some Advanta Resources (6);
mostly 80-acre parcels:
lowest: $2 / acre
highest: $360 / acre

Stark County:

eight parcels
all BJ Kadrmas except two Northern Energy Corp

Ward County:

number of parcels: too numerous to county
all: The Triplet T
mostly 80-acre parcels, but a lot of smaller parcels
lowest: $1 / acre
highest: $2 / acre

Williams County:

ten parcels
Northeern Energy (4); Phoenix Capital Group (3); Norra Resources (3)

Rivian Earnings -- 2Q22 -- August 11, 2022

Link here. it's "how" one writes the headline.

From the linked WSJ article:

“We’ve seen unprecedented levels of inflation, especially across our raw material inputs and lithium prices,” said Claire McDonough, Rivian’s finance chief.

“We’ve also experienced increased costs in regard to our expedited freight expenses,” she said.

Rivian is seeking to rein in those costs by increasingly shipping vehicles by rail instead of by truck, which is cheaper but could result in a longer delivery time to customers.

A couple of comments:

"everyone" is blaming inflation; it's getting old;
but shipping by rail rather than truck to save costs? Aren't delivery and destination charges passed o to the customer?
everything suggests we will know by the end of this year, 2022, whether Rivian thrives, or even survives.

Later: earnings -- link here --

Electric vehicle maker Rivian Automotive maintained its full-year guidance for deliveries Thursday.
The automaker reported second-quarter revenue that was higher than Wall Street expected.
But it trimmed its full-year financial outlook, saying that investors should now expect a wider loss and lower capital expenditures than it had previously forecast.
forecast:
full year adjusted loss before EBITDA: $5.4 billion vs $4.75 billion
results

revenue: $364 million vs $337.5 forecast
adjusted loss per share: $1.62 vs a $1.63 loss

Original Post

Pre-announcement, link here at techcrunch.

Rivian, the EV startup that went public last year in one of the largest IPOs in U.S. history, has bucked the trend set by Tesla and other EV makers during the first half of the year.

Tesla, the world’s largest EV maker, reported two consecutive quarters of delivery declines stemming from delays in the supply chain and COVID-related lockdowns in Shanghai that stymied production its Gigafactory there.

Lucid has cut its 2022 production forecast several times this year, now targeting 6,000 to 7,000 vehicles, down from its original plan to build 20,000. U.K.-based Arrival said Thursday that it is slashing its 2022 target from 400 to 600 vehicles down to just 20.

Meanwhile, Rivian, which set a goal to own more than 10% of the global market eventually, said it has ramped up production so far this year – a mix of the Rivian R1T pickup truck, R1S SUV and the EDV commercial electric vans it is making for Amazon – and reaffirmed its target to deliver 25,000 vehicles this year.

However, the Irvine, California-based manufacturer faces the same financial pressures affecting the automotive industry. In July, it began laying off 900 employees – about 6% of its workforce – as part of a restructuring plan.

From IBD:

Rivian has begun its restructuring plan that includes laying off about 6% of its workforce, or about 900 people, according to an Aug. 1 TechCrunch report, citing an internal email.

The layoffs are affecting every department, except manufacturing operations at its Normal, Ill., factory.

Meanwhile, Rivian is also having difficulty delivering vehicles to customers on time. Rivian Forums reported on June 11, 2022, that some Rivian SUV reservation holders had received an email indicating delayed deliveries. Some who had an April-May delivery date were told they'd have to wait until the August-September time-frame; others until October-December.

Estimate: FactSet analysts expect the company to post a loss of $1.63 a share vs. a 66-cent loss in the year-ago quarter. Sales are seen coming in at $335.4 million. There is no year-ago revenue figure.

Rivian has already said it produced 4,401 EVs in Q2, for a first-half total of 6,954.

Investors will want to know if Rivian still expects to produce 25,000 vehicles in 2022, which would require a continued ramp up.

Rivian's R1T all-electric pickup truck was the first of its kind to hit the market in July 2021, beating out the Tesla (TSLA) Cybertruck, which has yet to enter production, and the Ford (F) F-150 Lightning.

Headlines That I Missed -- August 11, 2022

Oilprice stories I missed while on the road:

Alberta oil output hits record high; too bad President Biden killed the Keystone XL his first day in office.
OPEC's oil production rises well below OPEC+ target.
OPEC+ oil production could dip in September, 2022;
are gas stations really inflating prices for profit? Alex Kimani;
world's largest LNG traders see losses mount despite high prices;
EU embargo on Russian coal goes into effect;
the Inflation Reduction Laugh-Out-Loud Act is a game changer for decarbonization. For investors, it's an open book test;
chip shortages and inflation are plaguing the auto industry;
Putin's natural gas weapon is weakening as inventories build;
a radical plan to reduce Europe's oil demand by 33%; laugh-out-loud;

Let's look at that last one: a radical plan to reduce Europe's oil demand by 33%; on the one-to-ten-LOL scale; time scale, by 2030:

accelerated electrification of cars and trucks: 10
boosting the fuel efficiency of ships, barges flowing down the Rhine: 10
scrap the suggestion regarding the Rhine: it will be dry by this time next year
reducing travel by switching to remote work some days of each week: 8
scrap the remote work suggestion; Europe won't have enough electricity to have any meaningful industry by this time next year;
switch from private car use to fossil-free travel: 10
only fossil-free travel is walking, running, and cycling, and even the latter is not completely fossil free;
limiting business travel by air: 10
shift cargo movement to:
across country, rail: 8
urban areas: cycling/walking: 10

Holiday Reminder -- August 11, 2022

Which two of the three are not alike?

unicorns
US Postal Service temporarily raising prices during "holiday" season
jackalopes

Definition: "holiday season" -- October 1, 2022, through September 30, 2023.

USPS: to "temporarily" hike prices for "holiday season" -- link here.

holidays to include but not limited to:

Eid al-Fitr
Easter
Eid al-Adha
Passover
hunting: opening day, North Dakota
Christmas
Juneteenth
Yom Kippur
Rosh Hashanah
Halloween
Custer's Last Stand: annual anniversary
Festivus for the rest of us
and everyone's favorite: Kwanzaa

Day 2 Of The NASDAQ Bull Market -- August 11, 2022

Updates

Later, 7:52 a.m. MT: link here. This is why EVs will not appreciate in price folks actually pay for them. Government will increase tax credits by amount elite auto makers increase car prices. So, yes, zero percent inflation. The president has this one right.

Original Post

Golf, match tournment, PGA vs LIV. PGA wins first round.

The PGA Tour and LIV Golf players’ first court hearing included major revelations about the LIV golfers’ deals—leading to the judge’s decision to deny an effort for three of them to play in the FedEx Cup Playoffs.

Irrelevant: when does a professional male golfer become irrelevant?

when he does not win a PGA tournament in over five years.

Totally irrelevant: when does a professional golfer become totally irrelevant?

when he only plays three-day tournaments
when he only plays eight tournaments / year
Exhibit A: when did we last see Phil play?

US equity market futures: all I can say, I'm thrilled I'm fully invested.

Sorry? You will be if you sold / will sell any of these seven, link here:

Dish Network
MRO
BKR
Warner Bros Discovery -- readers know my feelings on pure-play streaming companies
News Corp
GM -- readers know my feelings on elite vehicle companies
Alaska Air Group
me? I wouldn't invest in any of the above. I hold a few shares in two of the seven but only due to spin-offs or legacy stocks (bought decades ago)

Cost of renewables; Ford to increase prices of its elite vehicle (EV) F-150 Lightning. Link here.
the price increase = the federal tax credit = $7,000

$110,000+ after taxes, finance charges, destination/delivery fee, government fees, finance chargs, deal processing charges, electronic filing charge, and an emission testing charge fee are added in
note: not all of the above charges will apply
$7,000 / $110,000 = 6%
most other elite automakers have also increased taxes for the same reasons: to make a profit

Rivian: a "zombie" company. Link here.

Oil forecast:

demand will increase in 2022
as countries burn oil to produce electricity. Link here.
I'm lovin it
oil prices rose by over 1% on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring natural gas prices drive some consumers to switch to oil.

Disney: reality sucks. Link here. Also, here. Me? Not investing in either EVs or streaming.

the moat for streaming original content: deep pockets
Disney+ streaming: from $7.99 to $10.99 / month (a 38% increase in price)
Disney+ with ads: $7.99 / month

The price increases reflect the growing operating loss for Disney’s streaming services. Disney+, Hulu and ESPN+ combined to lose $1.1 billion in the fiscal third quarter, $300 million more than the average analyst estimate, reflecting the higher cost of content on the services.

The increased operating loss occurred even while Disney added about 15 million new Disney+ subscribers in the quarter, about 5 million more than analysts estimated.

Disney has previously stated it plans to lose money on Disney+ until 2024. Chief Financial Officer Christine McCarthy reiterated on Wednesday’s earnings conference call that Disney+’s losses will peak during the company’s fiscal 2022.

WTI Trending Higher; No Wells Coming Off The Confidential List -- Implications Of WTI Being Added To Brent Mix -- RBN Energy -- August 11, 2022

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

The Far Side: link here.

WTI; $93.43.

Natural gas: $8.439

Active rigs: 46

No wells coming off confidential list until next Tuesday, August 16, 2022.

RBN Energy: implications of adding WTI to the dated Brent price. Archived.

Like an aging pop star, price benchmarks have to re-invent themselves from time to time to maintain their status. The Dated Brent marker –– as much a survivor as Cher, still going strong at 76 –– has had successes and setbacks in the past and will undergo yet another transformation by June 2023, courtesy of price reporting agency Platts.

You definitely need to pay attention to this change, because Dated Brent is used as a pricing reference not only for several crude oil streams sold around the world, but also for other commodities such as LNG, fuel oil and other refined products and petrochemicals — oh, and financial derivatives too. Also, the latest version of the price marker will include an adjusted price for the U.S.’s prolific West Texas Intermediate (WTI). In today’s RBN blog, we discuss the details and implications of Dated Brent’s latest makeover for traders, refiners and other market participants.

Pages

Thursday, August 11, 2022