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Wednesday, September 28, 2022

Apple Trying To Hold The Line On Price Increases -- September 28, 2022

Link here.

From the linked story:

The report claims that Apple, the largest customer of TSMC, has rejected the supplier's plans to increase chip prices next year. TSMC has been planning to increase its prices by six to nine percent, depending on the fabrication process.

TSMC's chips were already around 20 percent more expensive compared to those from its direct rivals, but smaller foundries have ramped up their own prices in recent years due to higher material and logistics costs, and TSMC has committed to $100 billion in new investment over the next three years, motivating the company to increase its prices to maintain its premium and pass added costs on to clients.

TSMC was also reportedly keen to stop its clients from canceling orders and ordering more chips than needed in the hope of securing production line space and additional support from contract chipmakers, which has made it difficult for the company to understand real demand.

Following negotiations, Apple has apparently refused to accept further price increases. TSMC makes all of Apple's custom silicon chips, but Apple is estimated to make up more than one quarter of TSMC's entire revenue, meaning that the companies are fairly reliant upon each other. An improvement in the semiconductor industry's supply outlook despite inflation is believed to have hardened Apple's refusal to acquiesce to price hikes.

Apple probably has more "leverage" than most.

A Petro-Hunt Van Hise Trust Well Just Went Over 600K Bbls Crude Oil Cumulative -- Charlson -- September 28, 2022

The well:

  • 29978, 1,209, Petro-Hunt, Van Hise Trust 153-95-28C-21-3H, Charlson, t8/18; cum 460K 12/20; cum 600K 7/22;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-202231584556932073377693747974
BAKKEN6-2022305579565718663319232877106
BAKKEN5-202231531654561632312603100935
BAKKEN4-20223056605633164333138293853544
BAKKEN3-2022316153609816513340732995196
BAKKEN2-202228574357151562320973186933
BAKKEN1-20223164166456182338331381150
BAKKEN12-20213168696812190340495402790
BAKKEN11-202130653166021993415594132624
BAKKEN10-202131737472702057452274499617
BAKKEN9-20213071867226220344846436151022
BAKKEN8-202131729573712166446774444813
BAKKEN7-2021317866775923014757547100259
BAKKEN6-2021307617774723764910648625272
BAKKEN5-2021318526850925015405453655183

A Hess AN-Gudbranson Well Just Went Over 600K Bbls Crude Oil Cumulative -- September 28, 2022

The well:

  • 33533, 2,444, Hess, AN-Gudbranson-153-94-2215H-8, Elm Tree, t10/18; cum 339K 10/19; cum 601K 7/22;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20223140754077150620689206890
BAKKEN6-20223039873978163618972189711
BAKKEN5-20222947164678164216673166730
BAKKEN4-20222326292634133211227112270
BAKKEN3-20223149415058245120158186701488
BAKKEN2-20222641184102206915704136822022
BAKKEN1-202227414441581388210412098655
BAKKEN12-202130528552651994324353242015
BAKKEN11-20213058185732283037241372347

For The Archives -- Follow-Up In 2027 -- September 28, 2022

For the archives.

Oil: Link here. Charles Kennedy.

From the linked article:

Oil and gas executives told the Dallas Fed that recession remains a key concern ....

“It’s tough to tell where these crosscurrents are headed. On one hand, we don’t know if anyone has noticed, but the two-year to 10-year Treasury yield curve is inverted, implying recession, and China is on lockdown basically every other day, so that means lower prices in the near term (probably),” one executive commented.

However, the same executive noted, while long-term demand is strong and OPEC continues to underperform, “shale core exhaustion” and inventory concerns remain key issues.

Shale will likely tip over in five years, and U.S. production will be down 20 to 30 percent quickly. When it does—this feels like watching the steam roller scene in Austin Powers. Oil prices in the late 2020s will be something to behold,” the executive concluded.

When asked about expectations of a significant tightening of the oil market by 2024, one executive noted that the market is already tight, suggesting spot market prices are not based on true fundamentals.

“I struggle to understand why spot oil prices are as low as they are today and why there is still backwardation in the forward curve. It appears to me that the world is very short on supply, with big draws in Organization for Economic Cooperation and Development inventories still taking place even after a significant increase (and now leveling off) in North American drilling and completion activity,” the executive commented, adding that OPEC has “for the first time ever” acknowledged that there is no spare capacity.

Additionally, once China reverses its zero-COVID policy, demand will be driven up, while more Russian oil will be moved off the market pushing demand further.

ERCOT -- For The Archives -- September 28, 2022

See previous statement.

Our utility bill for the most recent month, here in north Texas, the DFW area. We have a "standard" program, no free days, no gimmicks, just full service, full pay.

We have no natural gas, only electricity.

This is our only energy utility bill, our entire energy / utility bill.

Note that we had the same number of days in the billing cycle compared to the previous month.

Compare this to the story at the linked story below.

Cost of renewables: New England utility seeks 160% rate increase. Kabuki dance. Regulators will grant rate increase but cut it by half. Link here.

End-Of-Day Report -- September 28, 2022

Gasoline demand, link here.

Apple: link here. Fascinating. Who are you going to believe? Buying opportunities. Earnings: October 27, 2022.

Abbreviated 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
.

Oil: Link here. Charles Kennedy.

From the linked article:

Oil and gas executives told the Dallas Fed that recession remains a key concern ....

“It’s tough to tell where these crosscurrents are headed. On one hand, we don’t know if anyone has noticed, but the two-year to 10-year Treasury yield curve is inverted, implying recession, and China is on lockdown basically every other day, so that means lower prices in the near term (probably),” one executive commented.

However, the same executive noted, while long-term demand is strong and OPEC continues to underperform, “shale core exhaustion” and inventory concerns remain key issues.

Shale will likely tip over in five years, and U.S. production will be down 20 to 30 percent quickly. When it does—this feels like watching the steam roller scene in Austin Powers. Oil prices in the late 2020s will be something to behold,” the executive concluded.

When asked about expectations of a significant tightening of the oil market by 2024, one executive noted that the market is already tight, suggesting spot market prices are not based on true fundamentals.

“I struggle to understand why spot oil prices are as low as they are today and why there is still backwardation in the forward curve. It appears to me that the world is very short on supply, with big draws in Organization for Economic Cooperation and Development inventories still taking place even after a significant increase (and now leveling off) in North American drilling and completion activity,” the executive commented, adding that OPEC has “for the first time ever” acknowledged that there is no spare capacity.

Additionally, once China reverses its zero-COVID policy, demand will be driven up, while more Russian oil will be moved off the market pushing demand further.

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

Active rigs:

WTI: $81.88. Up 4.3% today; up $3.38.

Natural gas: $6.88. Up 3.44%.

Four new permits, #39277 - #39280, inclusive:

  • Operator: Liberty Resources Management Company
  • Field: Enget Lake (Mountrail)
  • Comments:
    • Liberty Resources has permits for two NV C wells and two CA C wells, NWNW 21-158-93; 
      • to be sited, 357 FNL and between 419 FWL and 524 FWL

Eight permits canceled:

  • Rimrock: the "cloud" pad -- Stratus, Cumulus, Nimbus, Cirrus, and then the "skateboard trick" pad: Boardslide, Nollie, Nosepress, and Shifty, all in Dunn County;

Five producing wells (DUCs) reported as completed:

  • 37371, 540, Petro-Hunt, Jorgenson 158-94-2B-11-1HS, East Tioga, no production data,
  • 36875, 710 Grayson Mill, Domaskin 30-31 9H, Alger, no production data,
  • 36876, 864, Grayson Mill, Jack Cvancara 19-18 8H, Alger, no production data,
  • 38496, 1,396, CLR, Whitman FIU 9-34H2, Oakdale, minimal production, the Whitman wells are tracked here.
  • 38497, 1,446, CLR, Whitman FIU 10-34H, Oakdale, 2K over 7 days which extrapolates 10K over days; the Whitman wells are tracked here.

Approximately 130 wells: change of operator, from NP Resources, to Foundation Energy. These run the whole gamut from old wells to new wells, mostly in southwestern North Dakota: Billings County, Golden Valley County;

Tracking Frack Crews -- An Update -- Information Is Available -- September 28, 2022

UPDATE, from a reader: Enervus (drillinginfo.com) has a service that allows you to track the location of frac crews.

A reader's inquiry Can you direct me to a site that tracks the fracking/completion crew activity similar to what the ND site provides for Rig Count. I hae not been able to find anything.

My reply: I have never found that. I don't think that data is available anywhere. If it is, I've never come across it. 

If that information is available, I would be surprised. 

I've maintained "forever" that most folks who follow the oil industry have never evolved in their thinking from conventional oil to tight, unconventional, shale. This is another example. Most folks are still fixated / focused on rig counts. As I've said "forever," [don't take this out of context], rigs don't matter. Frack spreads matter; completions matter. And yet there is no regulatory requirement to track frack spreads as far as I know. 

This reader is correct: tracking frack spreads is important.  

I suppose one could suggest:

  • rig counts, rig locations: a lagging indicator
  • location of frack spreads: a leading indicator

Or do I have it reversed?

Off The Net For About An Hour -- Going Biking -- Wednesday, September 28, 2022

In addition, family commitments later today could impact blogging.

Hurricane Ian:

  • the hurricane:
  • Florida:
    • St Petersburg, FL: 27.7676° N, 82.6403°W.
    • Tampa, FL: 27.9506° N, 82.4572°W.
  • 9:41 a.m. CT: eye of the hurricane, per google winds -- 26.50° N, 82.55°.
    • just slightly south and just off-shore from St Petersburg, FL
    • St Petersburg, FL, now feeling the brunt of the storm
  • 11:01 a.m. CT: eye of the hurricane, per google winds -- 26.62° N, 82.59°.
  • 2:53 p.m. CT: eye of the hurricane, per google winds -- 26.71° N, 82.15°. East of St Petersburg/Tampa; slightly south "by definition" but obviously right on top of the cities. 
  • 4:25 p.m. CT: eye of the hurricane, per google winds -- 26.77° N, 82.10°.

International:

  • amazingly quiet with regard to explosions off coast of Denmark, taking out Nord Stream pipelines
  • only two countries have that capability 
    • neither country is likely to comment on the explosions unless necessary
  • US presidents are change agents
  • Biden, living in the shadow of Obama, feels the power
  • Biden, probably not a fan of Putin's 

Something to think about:

  • the explosions that rocked Nord Stream were not small;
  • reading the Wise Gals certainly suggests the (long?) process leading up to this, and the necessary approval process at the highest level

One of four lines might still be operational, but needs "certification," link to Charles Kennedy:

  • Russian analysts suggest the Nord Stream pipelines could still deliver (some) natural gas to Europe;

Russia shut down Nord Stream 1 indefinitely early this month, claiming an inability to repair gas turbines because of the Western sanctions. The twin pipeline of Nord Stream 1, Nord Stream 2 was never put into operation after Germany suspended the certification process after Russia invaded Ukraine.

Flashback. From February 7, 2022.

*******************************
Weekly EIA Petroleum Report

The report is linked here (dynamic link):

  • US crude oil inventories: increased by a paltry 0.2 million bbls despite continued record non-emergency releases from the SPR.
  • US crude oil inventories are about 2% below their five-year average.
  • More concerning, distillate fuel inventories decreased by 2.9 million bbls; now 20% below their five-year average.
  • Total commercial petroleum inventories decreased by 8.9 million bbls last week.
  • Jet fuel supplied was up slightly; up 2.6% compared with same four-week period last year.

WTI: up3.3% up $2.60; trading at $81.08. Tailwinds:

  • Biden administration talking about refilling the SPR (they won't );
  • OPEC talking about cutting production in light of falling prices;
  • overall inventories drop despite huge SPR releases, which, by the way, have been extended through November
  • President Biden must be aware of continuing challenges after November: he specifically mentioned oil companies need to bring down gasoline prices; gasoline prices, after falling for months, are now increasing again;
  • Ukraine war drags on
  • it is interesting that petroleum inventories are dropping at this time of the year and in light of the huge SPR releases
  • SecEnergy says US not considering limiting US energy exports to Europe

Two Wells Coming Off Confidential List Today; Three Tomorrrow -- September 28, 2022

UCLA

UCLA is buying a campus in Rancho Palos Verdes UCLA said it is buying two expansive properties owned by Marymount California University, a small Catholic institution in Rancho Palos Verdes that shuttered its doors last month. 
UCLA’s $80-million purchase of Marymount’s 24.5-acre campus and an 11-acre residential site in nearby San Pedro marks the university’s most significant expansion to help meet the burgeoning demand for seats. 
UCLA drew nearly 140,000 first-year applications for about 6,600 spots in fall 2021 and even more this year. But UCLA, whose 419-acre Westwood footprint is the smallest among U.C.’s nine undergraduate campuses, has no room to grow, prompting the campus to look for alternatives. 

Fiji. Link here.

AAPL: Apple scales back plans for increased production of the iPhone 14. Market spooked. 

Abbreviated 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
.

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

The Far Side: link here.

Active rigs: 46.

WTI: $79.91. Up temporarily due to Hurricane Ian.

Natural gas: $6.570. Despite Nord Stream pipelines likely out of service for a very, very long time.

Thursday, September 29, 2022: 50 for the month, 100 for the quarter, 439 for the year
38717, conf, Ovintiv, Calhoun 149-98-3-10-14H, Pembroke, see this post;
37428, conf, Enerplus, Cutthroat 149-94-36C-25H-TF,
30925, conf, BR, Saddle Butte 44-9TFH,

Wednesday, September 28, 2022: 47 for the month, 97 for the quarter, 436 for the year
38718, conf, Ovintiv, Calhoun 149-98-3019-6H, Pembroke, see this post;
38333, conf, Oasis, Soto 5097-12-3 2B, Siverston,

RBN Energy: Louisiana, Oklahoma, and Arkansas push for regional hydrogen hub as DOE plan advances. Archived.

Last week, the U.S. Department of Energy (DOE) unveiled its timeline for receiving and reviewing proposals to develop six to 10 clean-hydrogen hubs and said its aim was to decide by the fall of next year which projects will share up to $7 billion in DOE support. The competition for those dollars is sure to be fierce, with some of the strongest proposals likely to come from states like Texas and California that have a lot of renewable energy and ambitions to be leaders in the energy transition. Also, there is a joint effort by three states east and north of Texas to develop a hydrogen hub that would take advantage of their existing and planned hydrogen-production and wind assets, natural gas supply, refinery and pipeline infrastructure, and carbon sequestration potential. In today's RBN blog, we discuss the DOE's recent announcement and the three-state hydrogen-hub plan, which is dubbed H2ALO.