Updates
August 30, 2022: this is truly amazing. Pure serendipity. Purely coincidental.
Yesterday, last night actually, I checked in to see what ISO NE was up and noted a change, posted it, and went to bed. This a.m. first thing on my twitter feed, ISO NE is the headline story and is going to remain the headline story for US energy today: link here and link here. I may not even bother blogging any more today. Not! LOL.
Original Post
Disruptive:
From The WSJ today: Honda, LG Energy plan $4.4 billion EV battery factory in the US, location said to be somewhere in Ohio, the same state as Honda's longstanding auto plant in Marysville.
Now would be a great to read the Claremont Book Review essay.
Texas will start plugging more abandoned oil and gas wells this week, utilizing a federal grant as part of the Infrastructure Investment and Jobs Act. The Railroad Commission of Texas will begin the plugging of around 800 abandoned wells on September 1 with a $25-million federal grant for which it has applied with the U.S. Department of the Interior, the Texas oil and gas regulator said last week.
Although most oil and gas wells that are no longer productive are plugged by the responsible operators, the Railroad Commission administers a program to plug abandoned oil and gas wells.
The extra 800 wells that are expected to be plugged will advance the RRC’s well-plugging program, which is a key part of the agency’s mission to protect public safety and the environment across the state. The wells which will be plugged with the federal funding will add to the wells being plugged by the State Managed Plugging Program (SMP).
“We will use our established success with workplans, staff expertise and contracting processes to use the grant funding to plug abandoned wells,” Clay Woodul, RRC Assistant Director of the Oil and Gas Division for Field Operations, said in a statement.
There's probably a lot of money for Texas in the Inflation Reduction Act, also. What a great country.
Updates
Baghdad: has the city fallen?
Later, 7:24 p.m. CT: for the record, I'm watching the final round of the PGA FedEx tournament for the third time. I saw much of it live the first time, but then interrupted due to family commitments. Then last night, saw the fourth round from the fourth hole for the final group. Tonight, I'm seeing it from the beginning. I truly think the commentators missed how big a deal this particular tournament was. They never saw it coming. Right up until the 18th hole, it sounded as if they thought Scheffler was going to come back and win.
Original Post
Hopefully not behind a paywall.
Inertia alone will assure Chicago is around long after I'm dead but it won't be worth much.
From the linked essay:
Three years and one pandemic later, we know that technology can change and improve, and that a surprisingly large number of people prefer to tolerate its remaining deficiencies than to devote ten hours every week, the equivalent of 21 entire days out of every 365, to a soul-crushing commute.
Technological advances frequently reveal that what had been regarded as virtues really consisted of making a virtue of necessity. Many people who had considered themselves avid movie-goers, for example, have turned out to be movie-stayers, watching streaming services at home on a flatscreen the size of an SUV.
We may be in the process of discovering that, given the opportunity, we are an asocial species, eager to limit and curate the list of people with whom we spend time in the same room. In the early days of the internet, its enthusiasts talked about “the obsolescence of place,” a future where one could do just about anything from just about anywhere.
If that future is no longer distant, then among Chicago’s challenges will be one confronting most cities: the unplanned obsolescence of urban living.
****************************
Back to the Bakken
WTI: $96.91.
Natural gas: $9.369.
Active rigs: 46.
Three new permits, #39206 - #39208, inclusive:
One producing well (a DUC) reported as completed:
If you don't remember Clippy (Clipit) you weren't really there.
Clippy was a Microsoft product developed on a Mac. LOL.
You have no idea how much I love to blog. Or how much I love Apple.
I fell in love with Apple when I was stationed in Germany, in1984, Bitburg Air Base, Germany.
And then, Rhein-Main Air Base, Germany -- where I still remember the nurse who introduced me to another Mac. Wow.
Best television all weekend: Rory McIlroy winning the FedEx PGA tournament.
Individual who has lived up to his reputation: Phil M.
NASA: Artemis 1 scrub; problem with engine 3.
Bankruptcy, link here, great action photo:
Flashback: link here. I invested in ARKK for about six weeks. When she said things like this, I got out ... fast. What a doofus.
Hopefully investors can connect the dots, link here:
Later: my bad. I had forgotten that I unfollowed GasBuddy. He was becoming way too annoying.
Earlier:
Most interesting twitter observation over the past three days.
The #1 energy apologist for the Biden administration is GasBuddy. For the past 51 days, GasBuddy has tweeted not less than four times daily on average crowing that the price of gasoline had dropped another penny per gallon.
Today? Crickets.
Not one tweet over the past three days from GasBuddy....
... now that crude oil is surging, and gasoline prices are likely to follow suit even as the US driving season ends.
I'll keep watching. So you don't have to.
WTI is up over 4% today; up almost $4.00 / bbl and now trading just below $97.
Reminder: most shale operators quote a break-even price of $40 or thereabouts.
************************
Meanwhile
This should be a stand-alone post, but this seems okay to post it here.
So, why are oil companies trading at such a low multiple?
ESG.
Many fund managers are prohibited from investing in "ESG" stocks.
Or, however you say it.
Most interesting? A lot of those funds are reassessing their policies.
Reminder: Devon is the fastest growing oil company in the US.
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.
I'm lovin' it.
By the way, I bought more shares in a semiconductor company today. It took all the willpower I had to "skip" DVN but I was maxed out in energy, and the semiconductors are on sale for those with a 30-year horizon.
Judah and Levi don't know it yet but they have a few more shares in technology.
Pocahontas is exactly right: Fed chairman has plenty of room to put "millions out of work."
From August 28, 2022: lots of room to put "millions out of work” and still stay below 3% U-1 unemployment.
Jay Powell, a new sheriff in town:
- I don't think pundits truly understand what happened yesterday;
- the timing came right after the Inflation Reduction Act was passed and the Student Debt relief order was announced;
- Powell started his speech even before CNBC was ready to televise it;
- CNBC talking heads were standing by, waiting, never got the word, and were caught off-guard when they joined Powell's speech already in progress
- shortest major Fed speech ever; shortest Jackson Hole speech ever;
- most transparent Fed speech ever
- mispronounced "recession" when he said "pain"
- pushed a few incumbents under the bus
- the speech will be interpreted as empty words by many if Jay Powell doesn't announce a Fed meeting this next week (to convene before August 31, 2022)
The well:
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 30 | 1435 | 1238 | 1463 | 6822 | 5064 | 1360 |
| BAKKEN | 5-2022 | 27 | 1337 | 1479 | 1367 | 6354 | 6027 | 0 |
| BAKKEN | 4-2022 | 23 | 938 | 890 | 1003 | 5154 | 4684 | 175 |
| BAKKEN | 3-2022 | 31 | 1536 | 1445 | 1544 | 7828 | 6544 | 875 |
| BAKKEN | 2-2022 | 28 | 1472 | 1601 | 1442 | 7041 | 6674 | 0 |
| BAKKEN | 1-2022 | 31 | 1824 | 1882 | 1711 | 8203 | 7096 | 700 |
| BAKKEN | 12-2021 | 31 | 1479 | 1211 | 1738 | 6480 | 6105 | 0 |
| BAKKEN | 11-2021 | 30 | 973 | 1003 | 1045 | 5351 | 4953 | 0 |
| BAKKEN | 10-2021 | 31 | 1447 | 1544 | 1513 | 7637 | 7226 | 0 |
| BAKKEN | 9-2021 | 30 | 1549 | 1665 | 1598 | 8102 | 7704 | 0 |
| BAKKEN | 8-2021 | 31 | 1519 | 1484 | 1723 | 7994 | 7023 | 584 |
| BAKKEN | 7-2021 | 31 | 1606 | 1413 | 1662 | 8325 | 7920 | 0 |
| BAKKEN | 6-2021 | 27 | 1312 | 1457 | 1360 | 7150 | 6777 | 32 |
The well:
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 30 | 993 | 993 | 2835 | 25358 | 23839 | 1072 |
| BAKKEN | 5-2022 | 23 | 665 | 732 | 2004 | 14399 | 13707 | 390 |
| BAKKEN | 4-2022 | 24 | 629 | 752 | 1190 | 19073 | 18640 | 83 |
| BAKKEN | 3-2022 | 31 | 981 | 841 | 2152 | 25419 | 24374 | 583 |
| BAKKEN | 2-2022 | 28 | 1024 | 1097 | 1958 | 23307 | 22243 | 646 |
| BAKKEN | 1-2022 | 31 | 1063 | 1056 | 2640 | 26276 | 25333 | 481 |
| BAKKEN | 12-2021 | 31 | 1146 | 1149 | 2646 | 26149 | 25350 | 337 |
| BAKKEN | 11-2021 | 29 | 1239 | 1211 | 3002 | 23681 | 22241 | 1008 |
| BAKKEN | 10-2021 | 30 | 1071 | 960 | 3732 | 25382 | 22433 | 2502 |
| BAKKEN | 9-2021 | 28 | 957 | 967 | 2501 | 22105 | 21455 | 233 |
| BAKKEN | 8-2021 | 31 | 1054 | 1114 | 2899 | 25458 | 23599 | 1397 |
The well:
The Enerplus Cactus pad is tracked elsewhere; all six wells are great wells.
Monthly tracking:
Not reported, but easy to track:
The well:
Note: huge jump in production.
Note: 13,578 bbls over 10 days extrapolates to 40,734 bbls over 30 days. This jump occurred six years after original spud.
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 30 | 6129 | 6133 | 5295 | 10311 | 8590 | 1289 |
| BAKKEN | 5-2022 | 31 | 7179 | 7186 | 6022 | 12894 | 11891 | 507 |
| BAKKEN | 4-2022 | 28 | 6569 | 6574 | 6045 | 10481 | 10476 | 0 |
| BAKKEN | 3-2022 | 31 | 8141 | 8132 | 7245 | 12387 | 12302 | 79 |
| BAKKEN | 2-2022 | 28 | 7915 | 7942 | 7185 | 12076 | 11938 | 132 |
| BAKKEN | 1-2022 | 31 | 9179 | 9297 | 8340 | 15260 | 15252 | 0 |
| BAKKEN | 12-2021 | 31 | 10840 | 10687 | 10316 | 16717 | 16610 | 98 |
| BAKKEN | 11-2021 | 30 | 11008 | 11012 | 10394 | 15799 | 15784 | 9 |
| BAKKEN | 10-2021 | 31 | 11408 | 11429 | 11824 | 15427 | 15421 | 0 |
| BAKKEN | 9-2021 | 22 | 7397 | 7353 | 8350 | 5935 | 5722 | 208 |
| BAKKEN | 8-2021 | 26 | 7481 | 7498 | 9311 | 8533 | 8475 | 54 |
| BAKKEN | 7-2021 | 31 | 10410 | 10402 | 13761 | 13071 | 10825 | 2241 |
| BAKKEN | 6-2021 | 24 | 7893 | 7840 | 10753 | 9451 | 7702 | 1745 |
| BAKKEN | 5-2021 | 5 | 3038 | 3172 | 5346 | 3391 | 3328 | 62 |
| BAKKEN | 4-2021 | 30 | 24767 | 24820 | 37597 | 29574 | 29562 | 0 |
| BAKKEN | 3-2021 | 31 | 36792 | 36776 | 37948 | 45281 | 45257 | 0 |
| BAKKEN | 2-2021 | 10 | 13578 | 13393 | 7288 | 9197 | 9186 | 0 |
| BAKKEN | 1-2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| BAKKEN | 12-2020 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| BAKKEN | 11-2020 | 1 | 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 | 1 | 0 | 30 | 0 | 0 | 0 | 0 |
| BAKKEN | 3-2020 | 13 | 491 | 614 | 370 | 436 | 433 | 0 |
| BAKKEN | 2-2020 | 29 | 2053 | 2143 | 1282 | 415 | 412 | 0 |
| BAKKEN | 1-2020 | 31 | 2579 | 2530 | 1502 | 731 | 481 | 246 |
| BAKKEN | 12-2019 | 31 | 2587 | 2587 | 1874 | 648 | 566 | 79 |
Note:
Note: #38241 below -- trending toward 600K bbls crude oil cumulative just four years after completion.
The wells:
The wells, none of these have a date of release from the confidential list.
Wells of interest, but won't be affected by the Murex wells noted above; these run east to west; nowhere near the Murex wells above with regard to interference:
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 30 | 3363 | 3260 | 6623 | 14430 | 14428 | 2 |
| BAKKEN | 5-2022 | 0 | 0 | 85 | 0 | 0 | 0 | 0 |
| BAKKEN | 4-2022 | 19 | 2024 | 2036 | 4359 | 11367 | 11367 | 0 |
| BAKKEN | 3-2022 | 31 | 4341 | 4370 | 6691 | 20721 | 20721 | 0 |
| BAKKEN | 2-2022 | 28 | 3563 | 3633 | 7183 | 16305 | 16305 | 0 |
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 30 | 5334 | 5170 | 8302 | 10536 | 10535 | 1 |
| BAKKEN | 5-2022 | 0 | 0 | 146 | 0 | 0 | 0 | 0 |
| BAKKEN | 4-2022 | 19 | 3476 | 3469 | 5598 | 7868 | 7868 | 0 |
| BAKKEN | 3-2022 | 30 | 6226 | 6087 | 9723 | 12308 | 12308 | 0 |
| 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 | 66 | 0 | 0 | 0 | 0 |
| BAKKEN | 11-2021 | 10 | 1565 | 1635 | 4844 | 6469 | 6439 | 30 |
| BAKKEN | 10-2021 | 31 | 6336 | 6348 | 16008 | 25805 | 25706 | 99 |
The Far Side: link here.
WTI: $93.46. Still way too low. Iran could release upwards of 40 million bbls of oil from floating storage; US could be headed for a recession; US driving season has ended.
Natural gas: $9.378. Hurricane season about to explode?
Active rigs: 46
Friday, September 2, 2022: 1 for the month, 51 for the quarter, 390 for the year
Thursday, September 1, 2022: 0 for the month, 50 for the quarter, 389 for the year
Wednesday, August 31, 2022: 19 for the month, 50 for the quarter, 389 for the year
RBN Energy: Atlantic hurricane forecasts signal havoc for gas shoulder season.
The 2022 hurricane season is off to a quiet start, but the tropics seem to have awakened in recent days and are likely to ramp up in September — the peak month for tropical storm activity.
Forecasters are still predicting an above-average season, calling for as many as 10 hurricanes and up to five major ones. That would mean greater volatility for energy markets in any year, but the stakes are arguably higher this year than any time in recent memory — especially for natural gas.
That’s because prices are already at the highest level in over a decade and flirting with the $10/MMBtu mark. The gas market is tight domestically and globally, particularly in Europe. Lower 48 storage remains near the five-year low. European gas storage, after lagging far behind, has caught up to the five-year average this month, but the continent is still dependent on a consistent stream of U.S. LNG cargoes, particularly as it works to wean itself off Russian gas supplies. What happens when you add to that the prospect of hurricane-related disruptions to Lower 48 production or LNG exports, or both? Much of that will come down to the timing, path and strength of any impending storms. That’s a lot of unknowns, and where there is that much uncertainty, volatility is sure to follow. With the National Hurricane Center (NHC) predicting high chances of potential cyclone development as early as later this week, today’s RBN blog considers the possible implications for the U.S. gas market balance.
The hurricane season officially began on June 1, and it’s been eerily quiet so far with only three named storms to date, just one that entered the Gulf of Mexico and none that escalated to hurricane status.
Nevertheless, forecasters at the National Oceanic Atmospheric Administration (NOAA) and Colorado State University (CSU) earlier this month reiterated their forecasts for an above-average season. While NOAA pared back its confidence level in its forecast to 60%, from 65% previously, and reduced the high end of the ranges by one, it is still calling for 14-20 named storms reaching tropical storm strength or stronger before hurricane season ends on November 30. Of those, it expects six to 10 to become hurricanes, with three to five of those turning into major storms reaching Category 3 or stronger. The average for the 1991-2020 period is 14 named storms, seven hurricanes and three major hurricanes.
US inflation: putting everything together that has happened this past week suggests that Jay Powell is aware that the Fed is "way behind" in getting inflation under control.
US energy: putting everything together starting way back when the decision was first made to release a record amount of oil from the SPR suggests that the Biden administration knew very well then how severe the global energy situation had become.
By the way, the Biden administration made a shocking course correction this past week. This is serious and I'm not sure analysts have caught it yet.
For the past year, the Biden administration has been imploring, first, US oil companies to produce more oil, and then, imploring Saudi Arabia to do the same. For different reasons, neither did. Ironically, it was not a shortage of oil that was the problem, but the shortage of refining capacity in the United States.
Catching everyone by surprise, the Biden administration moved to plan C late this past week.
Plan A: seek an increase in oil production.
Plan B: seek an increase in refining.
Plan C: curb US exports of refined products; re-orient refined products from Texas toward the northeast.
Which, by the way, since the pipelines are full, puts the Jones Act in play.
On another note, as long as I'm rambling, over the past couple of years, Saudi Arabia has announced plans to increase refining capacity. A lot of analysts interpreted this as simply as picking low-hanging fruit.
However, it now appears there was much more to the story. Somewhere along the line, Saudi recognized two things:
That left Saudi Arabia a huge opportunity.
And then ...
... it was entirely unexpected, entirely fortuitous that refining capacity in Russia is going to decline significantly starting as early as next year (2023).
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.