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Monday, August 29, 2022

ISO NE -- Expensive -- August 29, 2022

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 

Link here.

Honda, LG Energy To Build EV Factory In The US, To Be Located Somewhere In Ohio -- August 29, 2022

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.

  • The companies did not name the location.
  • The U.S. plant represents the first major investment Honda has made in building out its own EV battery supply chain since announcing plans to go all-electric a little over a year ago. The Japanese auto maker is targeting a full switch to EVs and fuel-cell cars by 2040.

Now would be a great to read the Claremont Book Review essay.

Thank You, Joe Biden -- August 29, 2022

Link here.

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.

Chicago: That Tottering Town -- The Claremont Review Of Books -- Summer 2022

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. 

  • At the start of the fourth round, 
    • Scheffler, -23
    • Rory, -17
  • After the first hole:
    • Scheffler, -23
    • Rory, -16
  • Rory "spotted" Scheffler seven strokes after the first hole!

Original Post 

Link here

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:

  • Operator Bowline (Nine Point, Triangle)
  • Field: Buffalo Wallow (McKenzie)
  • Comments:
    • Bowline has permits for three Gustafson wells in lot 1 section 5-148-100; 
      • to be sited 254 FNL and betweeen 750 FEL and 800 FEL;

One producing well (a DUC) reported as completed:

  • 37896, 988, Iron Oil Operating, Boxcar 1-4-16H, Boxcar Butte, no production data,

Clippy -- August 29, 2022

If you don't remember Clippy (Clipit) you weren't really there. 

Link 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. 

Odds And Ends -- Monday, August 29, 2022

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:

Most Interesting Energy Twitter Observation -- August 29, 2022

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. 

Link 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.

Non-Bakken Post Of The Day -- August 29, 2022

Link here.

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.

From a few days ago:

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)

An Old CLR Winston Well In Long Creek Trending Toward 500K Bbls Crude Oil Cumulative -- August 29, 2022

The well:

  • 26052, 997, Winston 4-12H, Long Creek, t3/14; cum 440K 6/22; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-202230143512381463682250641360
BAKKEN5-202227133714791367635460270
BAKKEN4-202223938890100351544684175
BAKKEN3-20223115361445154478286544875
BAKKEN2-202228147216011442704166740
BAKKEN1-20223118241882171182037096700
BAKKEN12-202131147912111738648061050
BAKKEN11-20213097310031045535149530
BAKKEN10-202131144715441513763772260
BAKKEN9-202130154916651598810277040
BAKKEN8-20213115191484172379947023584
BAKKEN7-202131160614131662832579200
BAKKEN6-2021271312145713607150677732

A Zavanna Gust Well In Long Creek Goes Over 500K Bbls Crude Oil -- August 29, 2022

The well:

  • 19981, 1,003, Zavanna, Gust 2-11 1H, Long Creek, t3/12; cum 542K 6/22; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-202230993993283525358238391072
BAKKEN5-20222366573220041439913707390
BAKKEN4-2022246297521190190731864083
BAKKEN3-20223198184121522541924374583
BAKKEN2-2022281024109719582330722243646
BAKKEN1-2022311063105626402627625333481
BAKKEN12-2021311146114926462614925350337
BAKKEN11-20212912391211300223681222411008
BAKKEN10-2021301071960373225382224332502
BAKKEN9-20212895796725012210521455233
BAKKEN8-20213110541114289925458235991397

An Enerplus Cactus Pad Well Has Gone Over 500K Bbls Crude Oil Cumulative; That Little Ornamental Cactus On Your Desk -- August 29, 2022

The well

  • 29819, 1,623, Enerplus, Rebutia 149-92-35B-05H, Heart Butte, t7/15; cum 474K 6/21; cum 495K 6/22;

The Enerplus Cactus pad is tracked elsewhere; all six wells are great wells.

Metrics -- August 29, 2022

Monthly tracking:

  • permitted
  • spuds
  • (DUCs) drilled to depth but not completed
  • DUCs extended with waivers
  • completed

Not reported, but easy to track:

  • work-overs
  • re-fracks
  • returned to production

A BR CCU Gopher Well Goes Over 500K Bbls Crude Oil Cumulative -- August 29, 2022

The well:

  • 30780, 2,525, BR, CCU Gopher 2-2-15MBH, Corral Creek, t9/15; cum 321K 2/21; cum 497K 6/22;
  • Original frack:
    • test: 9/1/2015; 38 stages; 77351 bbls = 3.25 million gallons of water; 4.42 million lbs proppant; a small frack;
  • Re-frack (FracFocus):
    • 12/6/20 - 12/20/20; 7.2 million gallons of water; 87.3% fresh water by mass; a moderate re-frack;

Note: huge jump in production.

  • from 3,000 bbls/month, in 2019;
  • to around 40,000 bbls/month in March, 2022

Note: 13,578 bbls over 10 days extrapolates to 40,734 bbls over 30 days. This jump occurred six years after original spud.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-2022306129613352951031185901289
BAKKEN5-2022317179718660221289411891507
BAKKEN4-20222865696574604510481104760
BAKKEN3-202231814181327245123871230279
BAKKEN2-2022287915794271851207611938132
BAKKEN1-20223191799297834015260152520
BAKKEN12-202131108401068710316167171661098
BAKKEN11-20213011008110121039415799157849
BAKKEN10-20213111408114291182415427154210
BAKKEN9-20212273977353835059355722208
BAKKEN8-2021267481749893118533847554
BAKKEN7-20213110410104021376113071108252241
BAKKEN6-2021247893784010753945177021745
BAKKEN5-202153038317253463391332862
BAKKEN4-20213024767248203759729574295620
BAKKEN3-20213136792367763794845281452570
BAKKEN2-20211013578133937288919791860
BAKKEN1-20210000000
BAKKEN12-20200000000
BAKKEN11-20201000000
BAKKEN10-20200000000
BAKKEN9-20200000000
BAKKEN8-20200000000
BAKKEN7-20200000000
BAKKEN6-20200000000
BAKKEN5-20200000000
BAKKEN4-202010300000
BAKKEN3-2020134916143704364330
BAKKEN2-2020292053214312824154120
BAKKEN1-202031257925301502731481246
BAKKEN12-20193125872587187464856679

A BR CCU Badger Well Trending Toward 600K Bbls Crude Oil Four Years After Completion -- August 29, 2022

Note:

  • relatively small-to-moderate fracks
  • trending toward/exceeding 500K bbls crude oil four years after frack
  • still flowing, no pump four years later
  • Corral Creek: Dunn County
  • Corral Creek: an incredibly excellent location in the Bakken

Note: #38241 below -- trending toward 600K bbls crude oil cumulative just four years after completion.

  • FracFocus: fracked 3/19/18 - 4/3/18; 7.45 million gallons of water; 83.3% fresh water by mass;
  • operator: t4/18/18; 31 stages; 10,572,430 lbs total proppant; 177,392 bbls fluid = 7.45 million gallons

The wells:

  • 32838, 235, BR, CCU Badger 1A-TFH, Corral Creek, F, t4/18; cum 491K 6/22;
  • 32839, 755, BR, CCU Badger 1B-MBH, Corral Creek, F, t4/18; cum 460K 6/22;
  • 32840, 40, BR, CCU Badger 1C-TFH, Corral Creek, F, t4/18; cum 468K 6/22;
  • 32841, 70, BR, CCU Badger 1D-MBH, Corral Creek, F, t4/18; cum 591K 6/22;

The Murex Wells -- Borstad, Sheldon Mark -- In Tioga / West Tioga -- August 29, 2022

The wells, none of these have a date of release from the confidential list.

  • 38598, conf, Murex, Sheldon Mark 34-22H-A 3MB, Tioga, no production data,
    • spud: 12/19/21
    • south to north?
  • 38599, conf, Murex, Borstad 34-10H-A 2MB, West Tioga,
    • spud: 12/23/21
    • north to south?
  • 38600, conf, Murex, Sheldon Mark 34-22H-A 2MB, Tioga,
    • spud: 12/29/21
    • south to north?
  • 38601, conf, Murex, Borstad 34-10H-1 1MB, West Tioga, no production data,
    • spud: 12/26/21
    • north to south?

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:

  • 36840, 1,141, Hess, TI-State-158-95-3635H-9, Tioga; t3/20; cum 232K 6/22; off line 4/22 - 5/22;
  • 36841, 1,021, Hess, TI-State-158-95-3635H-8, Tioga; t3/20; cum 164K 6/22; off line 11/21 - 1/22;
  • 36842, 978, Hess, TI-State-158-95-3635H-7, Tioga; t3/20; cum 231K 6/22; recent production off line just six weeks:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-20223033633260662314430144282
BAKKEN5-202200850000
BAKKEN4-20221920242036435911367113670
BAKKEN3-20223143414370669120721207210
BAKKEN2-20222835633633718316305163050
  • 36843, 773, Hess, TI-State-158-95-3635H-6, Tioga; t3/20; cum 222K 6/22; recent production, off line just about the time the above wells spud
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-20223053345170830210536105351
BAKKEN5-2022001460000
BAKKEN4-202219347634695598786878680
BAKKEN3-20223062266087972312308123080
BAKKEN2-20220000000
BAKKEN1-20220000000
BAKKEN12-202100660000
BAKKEN11-2021101565163548446469643930
BAKKEN10-2021316336634816008258052570699

Only One Well Coming Off Confidential List This Entire Week --What Was Going On March, 2022? August 29, 2022

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

  • 37338, conf, Whiting, Ark 21-15H, 

Thursday, September 1, 2022: 0 for the month, 50 for the quarter, 389 for the year

  • None.

Wednesday, August 31, 2022: 19 for the month, 50 for the quarter, 389 for the year

  •  None.
Tuesday, August 30, 2022: 19 for the month, 50 for the quarter, 389 for the year
  • None.
Monday, August 29, 2022: 19 for the month, 50 for the quarter, 389 for the year
  • None.

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.

Parting Shots -- Late Sunday Night -- August 29, 2022

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:

  • the demand for refined products would increase over the next decade, not decrease; and,
  • the US was not going to build any more refineries (and obviously not Europe, either). 

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.