The Million Dollar Way (The Bakken Oil Blog): 08/17/22

Wednesday, August 17, 2022

Ready To Vote Blue In Texas -- Pumpkin Pie Filling -- August 17, 2022

Keller Independent School District.

Just down the street from us.

Removing books from library for "content review."

Among the books removed: the Bible.

I'm ready to vote "blue."

This is beyond the pale.

This is a big, big story here in north Texas, and now I see it's reached the national news.

Link: https://www.foxnews.com/us/texas-school-district-removes-bible-all-boys-arent-blue-from-library-shelves-content-review. [Google won't permit access to this link; one must "copy and paste."]

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Pumpkin Pie Filling

A reader wrote that in her/his home town there was no pumpkin pie filling to be found.

Well, now we know why

It's all in north Texas.

TV: Without question, the best television show right now, "Only Murders In The Building." Episode nine of ten episodes of season two was incredible. They squeezed six hours of material into thirty minutes.

Here's Another One -- And It Goes Over 500K Bbls Crude Oil Cumulative -- August 17, 2022

The well:

21427, 1,502, Slawson, Sniper Federal 2-6-7H, Big Bend, t10/12; cum 508K:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	29	6777	6797	11971	9193	5582	3468
BAKKEN	5-2022	30	8940	8873	13878	12116	8067	3898
BAKKEN	4-2022	24	8865	9012	13967	11970	7094	4758
BAKKEN	3-2022	31	13244	13318	26204	17875	11189	6532
BAKKEN	2-2022	26	10847	11034	21841	14458	5971	8357
BAKKEN	1-2022	7	2063	1344	5549	2788	0	2754
BAKKEN	12-2021	0	0	0	0	0	0	0
BAKKEN	11-2021	0	0	0	0	0	0	0
BAKKEN	10-2021	1	219	0	6207	402	0	397
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	0	0	0	0	0	0	0
BAKKEN	3-2021	0	0	0	0	0	0	0
BAKKEN	2-2021	0	0	0	0	0	0	0
BAKKEN	1-2021	3	226	884	196	313	242	56
BAKKEN	12-2020	23	1475	1154	1463	1966	1432	419
BAKKEN	11-2020	0	0	0	0	0	0	0
BAKKEN	10-2020	1	0	67	0	25	20	0
BAKKEN	9-2020	27	2411	2759	800	3321	2908	279
BAKKEN	8-2020	1	9	76	0	12	0	7
BAKKEN	7-2020	23	2025	2011	212	2977	2639	225
BAKKEN	6-2020	2	174	402	17	279	235	34
BAKKEN	5-2020	5	449	0	45	771	746	0
BAKKEN	4-2020	25	1222	975	212	2594	2467	2
BAKKEN	3-2020	31	1769	1742	280	3719	3564	0
BAKKEN	2-2020	27	1650	1956	253	3266	3131	0
BAKKEN	1-2020	31	1920	1834	324	4262	3906	0
BAKKEN	12-2019	31	2111	1863	458	5229	4851	0

Here's Another One -- August 17, 2022

The well:

22844, 1,600, MRO, Diamond A 44-21TFH, t2/13; cum 324K 6/22; drilled back in 2013, goes from less than 1,000 bopm to more than 13,000 bopm:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2022	30	10460	9990	20011	11949	10111	762
BAKKEN	5-2022	16	4763	4566	14890	4193	3560	151
BAKKEN	4-2022	0	0	309	0	0	0	0
BAKKEN	3-2022	25	7113	7109	19084	7629	6449	449
BAKKEN	2-2022	28	9267	9325	20622	9526	7748	804
BAKKEN	1-2022	29	13366	13219	29551	12601	9932	1294
BAKKEN	12-2021	23	7645	7602	28538	8418	7027	601
BAKKEN	11-2021	0	0	0	0	0	0	0
BAKKEN	10-2021	0	0	0	0	0	0	0
BAKKEN	9-2021	22	634	551	634	644	462	0
BAKKEN	8-2021	29	814	950	916	843	592	35
BAKKEN	7-2021	26	748	735	951	726	451	77
BAKKEN	6-2021	6	202	131	142	209	116	46
BAKKEN	5-2021	23	769	752	467	816	621	15

Gasoline Demand Up Nicely -- End-Of-Day Report -- August 17, 2022

What we're all waiting for today, gasoline demand, link here:

The data supports the thesis that we've discussed on the blog. If the thesis is accuraet, all things being equal, we should see continued upward trajectory for one, maybe, two more weeks.

Natural gas: this pretty much says it all -- Europe's energy crisis seems to be getting worse every day --

Stock making biggest move after-hours: Cisco.

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.

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Back to the Bakken

WTI: $88.03. Up nicely today; about 1.75%; up about $1.50.

Natural gas: where all the action will be through then end of this year, down about 1%; trading at $9.226.

Active rigs: 47

Eight new permits, #39171 - #39178, inclusive:

Operators: Liberty Resources (4); CLR (3); Hunt
Fields: Enget Lake (Mountrail County); Dollar Joe (Williams County); Divide County (a SWD)
Comments:

Hunt's SWD will be in Alexandria oil field, Divide County;
Liberty Resources with permits for two Alton wells and two Sylvia permits, all in SWNW 16-158-93;

to be sited between 2128 FNL and 2233 FNL and all at 455 FWL;

CLR has permits for three Clyde Hause wells, in SESE 12-155-97;

to be sited 350 FSL and between 946 FEL and 856 FEL.

Five permits canceled:

Hess (3): three SC-JW Hamilton permits in Williams County;
Oasis (2): one McCowan permit and one Erickson permit, both in Burke County;

Eight producing wells (DUCs) reported as completed:

34313, 3,377, XTO, Arlene Feederal 44X-23B, North Fork, first production, 6/22; t--; cum 19K over 13 days;
34315, 3,526, XTO, Arlene Feederal 44X-23C, North Fork, first production, 6/22; t--; cum 26K over 14 days;
36627, 2,901, XTO, Arnold 21X-17H, Tobacco Garden, first production, 5/22; t--; cum 90K over 57 days;
36628, 2,113, XTO, Arnold 21X-17G, Tobacco Garden, first production, 5/22; t--; cum 78K over 57 days;
38408, 920, Whiting, Fred TTT 12-25XH, Sanish, no production data,
38452, 2,287, Slawson,Howitzer 3-25H, Big Bend, no production data,
37483, 0 (no typo; typical for BR), BR, F Jorgenson 1A TFH, Elidah,
37481, 0 (no typo; typical for BR), BR, F Jorgenson 1C TFH, Elidah,

What's More Exciting Than A Tesla Fire? A Lightning Strike In The Oil Patch -- Why Folks Simply Keep Accumulating Shares In Oil And Gas -- August 17, 2022

On a down day in the market, Denbury is up as much as 10% today; up $8.88 and trading at around $88.

Urban Tales -- August 17, 2022

I recently re-subscribed to The New Yorker with an introductory offer of six months for $26 or something like that with easy cancellation if I don't want to continue the subscription at full price, $119, or something like that.

The August 8, 2022, issue with the drawing of two bicycles chained to a "no parking sign" on the cover has an essay that is worth the price of a full year's subscription: under "American Chronicles," and article with this heading: "The Hard Sell: A door-to-door salesman's quest to rebrand his profession."

I was a door-knocker for one full summer back in in the early 1970s. Hardest job I ever had?

Even in this 12-page article -- one page devoted to a full page photograph -- the featured salesman, Sam Taggart says the second-hardest job in the world is door-to-door sales, second only to the military.

Most lucrative door-to-door sales right now? Selling solar panels. Next: pest control.

D2D selling has grown into a much bigger deal than when I did it.

But the actual job -- the actual sales job -- is no different than how I remember.

Number one: rejection. For every sale I made, I must have had nineteen rejections. Sam Taggart says successful salesmen turn rejection into an "asset," or a goal.

Number two: successful salesmen -- passionate about their product and believe in it.

Number three: successful salesmen learn how to "size up" a potential customer and adjust their spiel.

From which state -- which state -- do the largest number of (and perhaps the most successful) salesmen come from?

I'll answer that later.

Hint: the men from this state get two years of training by selling Jesus door-to-door, which, they say, is the hardest product to sell.

For Investors: Demographics -- August 17, 2022

We touched on this earlier. A huge story that I don't see much discussed.

But this is huge.

The "millennials" will be larger in number than the baby boomers. It's possible the "millennial" population" is already larger than the existing "baby boomer" population. The former is growing, the latter is dying off.
How did that happen?
For investors? Bullish.
Every "millennial" will want an iPhone. Many / most will get one.
How many / what percent of baby boomers had an iPhone?
Just saying.

Need to add one thing:

Every "Gen Z" will want an iPhone: many / most already have a starter phone. Sophia has a starter iPhone -- wi-fi only; no sim card; and no monthly feel. That will come in two years. And Sophia, age 8 years, already knows what a sim card is. LOL.

By the way, the Apple iPhone blue / green "alert" is one of the cleverest marketing tools ever thought up by anyone. There is talk that Apple is under great pressure to discontinue that "alert." It's seen by many to be very, very discriminatory, like calling monkeypox, "monkeypox."

Now, to clarify: the millennials overtook the baby boomers as America's largest generation back in 2020.

The millennials are aged 26 to 41 years of age, this year, 2022.

In 2024, the age spread will be 28 to 43 years of age.

More than half of that age group -- the millennials -- will vote for the Democratic nominee for US president. More than half.

A lot of folks in Wyoming voted conservatively, but there are not a lot of folks in Wyoming.

Florida is likely to go from deep red to purple, with a red governor, and a newly elected blue US senator. I am no longer (never was) convinced of a red wave in 2024.

The big four:

California: deep blue
Texas: light red
Florida: purple
New York: deep blue

The era of the silent majority calling the shots is over.

The boomers, aging, will appreciate the Democratic platform:

more spending on health;

they won't worry about the deficit (they will talk about it, but they won't worry about it)
they will vote their pocketbook / invest to win

boomers are driving less and less as they get older; price of gasoline becomes less of an issue;
it will be all about healthcare and monthly utility cost (electricity, natural gas)
inflation?

boomers tend not to move residences; housing/rental (other than used cars) is major issue with regard to inflation
boomers less affected by inflation than gen x'ers
gen x'ers more affected by inflation than millennials -- but both affected to similar extent
millennials: will adapt to higher inflation

Generation X won' turn out to vote.

The southern surge: will disproportionately affect blue cities with populations greater than 500,000. Elsewhere: no impact.

See this post.

Generations defined:

More here:

in graphic form:

Don't Read My Lips (I'm Masked Anyway) -- Watch What I Do --

I have no idea what this is all about -- I have not gone to the links yet -- but I really don't care.

Reality will trump (no pun intended) wishful thinking. Or perhaps better said, with puns intended, "reality will trump Greta."

And for me, right, wrong, or indifferent, everything points to oil and gas being around -- and not only "around," but also a great investment -- for the next twenty to thirty years.

US crude oil inventories decreased by a whopping 7.1 million bbls; despite the SPR release of one million bopd for the past several months; this is simply astounding.

And, yes, this is from a very biased source. So, what?

Right below that article, as long as we're doing screenshots, this screenshot:

All I could think about was the shortage of pumpkin pie filling this past year.

Some screenshots may have been altered for more effect, but not to change the underlying story.

Commercial Crude Oil Inventories Drop A Whopping 7.1 Million Bbls -- August 17, 2022

Link here:

US crude oil inventories decreased by a whopping 7.1 million bbls; despite the SPR release of one million bopd for the past several months; this is simply astounding;
US crude oil inventories now stand at 425.0 million bbls; 6% below the five-year average;
US crude oil imports ... yawn.
US refiners operating at 93.5% of their operable capacity; trending higher
US distillate inventories increased by 0.8 million bbls; 23% below the five-year average;
US jet fuel supplied was up 5.6% compared with same four-week period last year;

WTI: following the report:

WTI up 1.64%; up $1.42; trading at $87.95

We will get gasoline demand data later this afternoon.

Meanwhile, Biden's ban on drilling on federal land, reinstated by a judge.

judge feels pain of collapsing oil prices

Sanctions:

two things

first, sanctions take time to work;
second: with regard to Russia, it's the long-term impact of sanctions that will cripple Russia

Russia was unable to even re-furbish one turbine for its Nord Stream 1 pipeline
any thoughts on whether that county could "do" a major project in the Arctic without western technology and expertise?

short answer: no.

Russia's Arctic LNG project is in jeopardy due to sanctions

the LNG carriers meant for the plant will no longer be built

link here.

And finally:

when prices rise, one might sell inventory at higher prices;
when prices decline, one might withhold sales from inventory, and wait for higher prices (that's why farmers have elevators and join co-ops with huge elevators)
Saudi: prices falling and yet Saudi crude oil inventories have also fallen; selling their inventory at lower prices? Why would they do that?

for one thing, they have to meet contractual agreements

link here;

The Apple Page -- Shares Up On A Down Day -- August 17, 2022

ALERT! Every panelist on CNBC's "FAST MONEY" today said to sell AAPL. The chartist went one step further and said sell ALL APPL. Link here.

See disclaimer below.

New products: Apple targets September 7, 2022, for iPhone 14 launch in flurry of new devices. Link here.

AAPL: On a "down day" for the market, AAPL is up nicely. Call of the day: Credit Suisse, target raised to #201 from $166.

Credit Suisse: previously posted.
Gene Munster: $285 in mid-summer, 2024.

TGT: a real debacle

we talked about Target before and inventory control the past six months
buying opportunity? Was this a one-off?
down 2.5% in pre-market trading and well off its 52-week high
what TGT does with its dividend will mean much more than its guidance
but look at this: same-store sales rose 2.6% vs expectations of 2.8%;
second consecutive significant earnings miss
net sales: $26 billion vs. $25.84
comparable sales: 2.6% vs 2.84%
margins: 21.5% vs 24.2% (as a reminder, AAPL has margins of over 40%)
operating income: $321 million vs $534.8 million
EPS: 39 cents vs 73 cents (wow)
again, inventory control was the big problem
one wonders: does Amazon have a problem with inventory control?
profit fell nearly 90% year-over-year
earnings expectations missed by 46%

Five Years Ago: Natural Gas Priced At $2.50; Today, Trending Toward $10 -- Changes Everything -- August 17, 2022

Midland: part of the Permian is tracked at the sidebar at the right.

NOG:

link here, press release;
Midland Basin
$110 million
1,600 net acres in Howard County, TX
Priced at high end.
$68,000 / net acre.
$61,000 / flowing boepd.
from below:

a gas price assumption of $2.50/MMbtu was used in this analysis.
the Big Star wells fall in acreage that is very favorable and breaks even below $30-$35 per barrel. In addition, the most recent Callon investor presentation shows that the active Big Star wells average 30-day IP rates of over 1,000 Boe/d, with well costs of $6 MM for 9,000’ laterals.

From April 22, 2016:

Earlier this week (back in April, 2016), Callon Petroleum bought assets from Big Star Oil and Gas in the Central Permian Basin and nearly doubled their total acreage in the region.

The majority of the purchase is located in Howard County, which has been an increasingly popular growth area. This is the sixth acquisition in the last year-and-a-half in Howard County, with major purchases from Diamondback, Encana, and Moss Creek among others. The neighboring counties of the Midland Basin (Martin, Glasscock, Andrews, and Midland) have historically been more active, but encouraging results in Howard County have caused many to call this a possible new “core” area for development. Analysis on the recent well characteristics tells part of the story for this recent interest.

Over the past three years, the 30-day maximum IP rates have more than doubled in Howard County, reaching levels competitive with the very active Midland County acreage and attracting significant amounts of capital investment, even in the current low oil price environment.
Taking a closer look at the Big Star wells currently in operation, we can get an idea of how Callon’s newest acquisition compares to the county averages.

Using BTU Analytics’ in-house economics model and individual well based data. A gas price assumption of $2.50/MMbtu was used in this analysis. The Big Star wells fall in acreage that is very favorable and breaks even below $30-$35 per barrel. In addition, the most recent Callon investor presentation shows that the active Big Star wells average 30-day IP rates of over 1,000 Boe/d, with well costs of $6 MM for 9,000’ laterals. These numbers put the Big Star wells toward the top of list of current operators.

The Apple Page -- The Vietnam Gambit -- August 17, 2022

Link here.

The Apple Page -- Sold Out -- August 17, 2022

As Apple FanBoy #3, this warmed the cockles of my heart.

These were announced yesterday; I failed to link it yesterday .... because I did not care.

But, wow, look at this.

NOG: Permian Acquisition -- August 17, 2022

Portland, OR: bottom of the heap.

link here.
except for the headline and one data point, the story is worthless;
emperor with no clothes
the data was taken from 2019 and studied all the way up until this year. Out of 62 cities, Portland came in at No. 60.
Researchers say downtown Portland only has 41% of the activity it did in 2019.

Germany:

shipping halted on Rhine
Kaub: 50 miles west of Wiesbaden; about 2/3rds of the way to Switzerland
similar to stopping barges on the Mississippi at St Louis, but economically, so much worse

Kaub is the home of the Kaub gauging station, a "decisive" Rhine water level metering site.

Kaub is located at the shallowest part of the Middle Rhine; ships with freight from the ports on the North Sea have to pass Kaub on their way to the southwest of Germany, where a major portion of the German industry is located. Once the level at the gauge passes the 78 cm mark (this is not the actual depth of the river), a low water level threshold is declared. At this level, due to much lower possible load, four time more barges are required to transport the same volume of goods as compared to the high (250 cm) level.

Europe:

link here, and, here.

High-grading crude oil:

I haven't read the article yet, but one wonders if the Bakken is not the gold standard for high-grade crude oil?

light oil
flaring minimized
EOR

see RBN Energy below

TGT: a real debacle

we talked about Target before and inventory control the past six months
buying opportunity? Was this a one-off?
down 2.5% in pre-market trading and well off its 52-week high
what TGT does with its dividend will mean much more than its guidance
but look at this: same-store sales rose 2.6% vs expectations of 2.8%;
second consecutive significant earnings miss
net sales: $26 billion vs. $25.84
comparable sales: 2.6% vs 2.84%
margins: 21.5% vs 24.2% (as a reminder, AAPL has margins of over 40%)
operating income: $321 million vs $534.8 million
EPS: 39 cents vs 73 cents (wow)
again, inventory control was the big problem
one wonders: does Amazon have a problem with inventory control?
profit fell nearly 90% year-over-year
earnings expectations missed by 46%

NOG:

$110 million
Priced at high end.
$68,000 / net acre.
$61,000 / flowing boepd.

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Back to the Bakken

The Far Side: link here.

WTI: $86.52. Has the "slide" stopped?

Natural gas: $9.440. Trending toward $10? It's hard to think we won't hit $10 this autumn.

Active rigs: 46

Thursday, August 18, 2022: 11 for the month, 42 for the quarter, 381 for the year

38369, conf, CLR, Fuller 6-2H1,

Wednesday, August 17, 2022: 10 for the month, 41 for the quarter, 380 for the year

38002, conf, Hess, CA-E Burdick-LE-155-95-29H-1,

RBN Energy: high-grading crude oil production assets to reduce GHG emissions. Archived.

There’s a growing acknowledgment in the U.S., Europe and elsewhere that crude oil will remain an important part of our energy future for decades to come. At the same time, however, the drive to decarbonize will continue, and as part of that effort, oil producers will be working to ratchet down their greenhouse gas (GHG) emissions. A lot of that will be achieved through the purchase of carbon offsets or the use of carbon capture and sequestration (CCS), but another approach is for producers to “high-grade” their portfolios by divesting production assets that generate inordinately high volumes of carbon dioxide (CO₂) and methane during production and investing instead in assets with much lower carbon intensity. In today’s RBN blog, we discuss the push by some producers to shift to “lower-carbon oil.”

Target — Huge Miss — 2Q22

We talked about Target before.

Buying opportunity? Was this a one-off?

NOG — Permian Bolt-On —August 17, 2022

Priced at high end.

https://www.northernoil.com/news-media/press-releases/detail/324/nog-announces-midland-basin-bolt-on-acquisition.

$68,000 / net acre.

$61,000 / flowing boepd.

Pages

Wednesday, August 17, 2022