"Two-Buck Chuck" Is Now "Three-Buck Chuck" -- October 3, 2022

Wow, I've learned so much from the blog, not just the Bakken. 

Case in point: "two-buck chuck."

I moved to southern California in the autumn of 1973. My cup runneth over.

Or should I say "cups"?

One cup was wine and one wine was "two-buck Chuck" -- Trader Joe's store brand wine. And to survive in state that was home to Napa Valley it had to be good. I don't recall.

Because of the blog, I came across a reference to "two-buck Chuck" now becoming "three-buck Chuck.”The wine isn't that much more expensive to make and Trader Joe's could still make a profit on TBC but for the transportation costs.

Remember, regardless of what you might be paying for gasoline in your home town, "they're" paying upwards of $8 / gallon of gasoline out in California. Eight dollars a gallon! Governor Newsom will see that it goes higher. That's fine. But I digress.

While I'm fact-checking the TBC story, I came across a factoid -- Aldi owns Trader Joe's.

That's a true statement.

Some fact-checkers say it is not true.

This article provides the background; you decide.

By the way, for those that do not know the history of TBC, it has its own wiki entry. 

We have an Aldi about five minutes by car, just down the street from us. I shopped at Aldi's in England; I don't recall ever visiting the Aldi down the street from us.e Maybe tomorrow.

CLR With Four New Permits -- October 3, 2022

OXY, CVX, DVN:

• link here, Motley Fool;
• link here, TipRanks;

LMT (Lockheed Martin): increased its quarterly dividend from $2.80 to $3.00. In line with previous annual increases: 20 cents / share. Record date: 12/1/22; pay date: 12/30/22.

CVX:

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Back to the Bakken

Active rigs: 45.

WTI: $83.63. Up 5.21% today; up, $4.14.

Natural gas: $6.470. Down 4.37%; down 30 cents.

Four new permits approved:

• Operator: CLR
• Field: West Capa (Williams)
• Comments:
• CLR has permits for four Smouse wells, NENW 28-155-96; 
• to be sited between 1142 FNL and 1007 FNL and 1690 FWL;

Two permits renewed:

• Enerplus: one Queen permit, and one Flatiron permit, both in McKenzie County;

Change in operator, from XTO to White Rock:

• about 50 wells
• Williams, McKenzie and Billings counties
• mostly older wells;

ISO NE: Key Data Point To Track -- October 3, 2022

Updates

Later, 8:29 p.m. CT: and right on cue, here it is, 16% net imports by resource mix. LOL.

Original Post 

Link here: percent imports in the resource mix.

The highest I have seen to date is 16% -- which I saw overnight, October 2 - October 3, 2022.

Eagle Ford / Austin Chalk Deal -- South Texas (Not The Permian): SilverBow Resources Announces Bolt-On Acquisition -- October 3, 2022

Link here.

Acquisition highlights and comments:

• from an undisclosed seller for a cash purchase price of $87 million 
• transaction comprised of incremental working interest on SilverBow’s existing acreage as well as new adjacent acreage; 
• provides for extended laterals, additional inventory locations and more efficient development
• June 2022 net production of approximately 1,100 barrels of oil equivalent per day; 44% oil 
• adds 5,200 net acres in the proven highly economic oil and condensate windows of Dewitt and Gonzales counties 
• significant upside in Austin Chalk, which has been de-risked with one well in center of acreage block having produced over 200,000 barrels of oil to date 
• in combination with existing position, acquisition creates consolidated 13,000 net acre block with 100 high rate of return drilling locations 
• combined position allows optimized development allowing for 70,000 additional lateral feet to be drilled with 12 fewer wells; optimized development significantly improves capital efficiency 

Comments:

• price per acre?
• not sure exactly how many acres acquired, but it must have been less than 13,000 net acres
• the acquisition, in combination with existing position, created a consolidate 13,000 net acres
• let's art with 6,000 acres as a guestimate
  
• $87 million / 6,000 acres = $14,500 but that's an incredibly good price in the Eagle Ford
• if more like $25,000 / acre, then $87 million / $25,000 = 3,480 acres
• if as much as $40,000 / acre, then 2,175 acres
• but look at this, price per flowing boepd
  
• net production of 1,100 boepd and most of it natural gas (44% oil)
• $87 million / 1,100 boe = a "beyond-the-pale" price paid of almost $80,000 / boepd
• reasonable comparisons? $20,000 to $40,000 / boepd

The graphics:

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 Buffett -- October 3, 2022

Pre-market:

• WTI now up over 5%; up over $4.00 / bbl; now trading at $83.72.
  

CVX ticker:

Re-posting (for the second time):

Buffett 

For perspective, if I recall correctly, Buffett bought Burlington Northern railway for $25 billion. At the time, Buffett said he "bet the company on that deal."

Now, decades later, he spends an equal amount on oil. 

My hunch: Warren and I have invested the same proportion of our investment portfolio in CVX over the years.

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.

Several Wells Comiing Off Confidential List Over Weekend -- October 3, 2022

Russia goes nuclear? In The [London] Guardian -- US would destroy Russia's troops if Putin uses nuclear weapons in Ukraine.

Ukraine: 

Ukrainian forces achieved their biggest breakthrough in the south of the country since the war began, bursting through the front and advancing rapidly along the Dnipro River, threatening to encircle thousands of Russian troops.

Ukraine: it's now being reported that "a Russian nuke train" is now rolling. This Russian nuke train has tanks that carry tactical nuclear shells. My hunch: there are now serious conversations in the Pentagon about pre-positioning tank-killing A-10s in Ukraine, or Poland.

OPEC: will Russia attend the "emergency" meeting to cut production?

Fracking: while Europe banned fracking; the US transformed the technology. 

Speaking of which -- lately, we're not hearing a lot of politicians talking about banning fracking. I wonder if that has anything to do with $5-gasoline across the US and $7-gasoline in California.

Focus on fracking: overnight edition. 

• US oil supplies are at a new 19½ year low; 
• SPR is at a new 38 year low; 
• gasoline supplies are at a 10 month low; 
• total oil + oil products supplies are lowest in nearly 14 years…
  

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Back to the Bakken

The Far Side: link here.

Active rigs: 45.

WTI: $83.13. Up almost 5%; up $3.64.

Natural gas: $6.565. Is Europe in better shape than some analysts think?

Tuesday, October 4, 2022: 8 for the month, 8 for the quarter, 453 for the year
38805, conf, Crescent Point Energy, CPEUSC Fantuz 6-13-24-158N-100W-MBH-LL,
36989, conf, Enerplus, Shad 149-94-36C-25H,
32123, conf, Whiting, Niemitalo 31-15-3XH,

Monday, October 3, 2022: 5 for the month, 5 for the quarter, 450 for the year
29791, conf, Hunt Oil, Trulson 156-90-11-14H-3,

Sunday, October 2, 2022: 4 for the month, 4 for the quarter, 449 for the year
36988, conf, Enerplus, Bluegill 149-94-36C-25H-TF,
30922, conf, BR, Saddle Butte 44-9 MBH,
29792, conf, Hunt, Palermo 156-90-2-31H 5,

Saturday, October 1, 2022: 1 for the month, 1 for the quarter, 446 for the year
38715, conf, Ovintiv, Calhoun 149-98-3-10-15H, 

RBN Energy: EQT acquisitions boost its role in West Virginia gas, NGL markets. Archived.

It’s hard to think of a $5.2 billion acquisition as a “bolt-on,” but that’s what EQT Resources — the U.S.’s #1 natural gas producer — is calling its recently announced purchase of Tug Hill’s gas production assets and XcL Midstream’s pipeline and processing assets in northern West Virginia. The deal, which represents the largest acquisition in the Marcellus/Utica Shale in five years, will not only give EQT even more scale in the nation’s leading gas-and-NGLs production region, it also will lower EQT’s breakeven gas price and its emissions intensity. Oh, and with the deal, EQT is doubling its share-repurchase authorization and increasing its year-end-2023 debt-reduction goal by 60%. In today’s RBN blog, we examine and assess these and other aspects of the agreement.

Several factors have been driving the frenzy of M&A activity in the U.S. oil and gas space, including (1) renewed confidence that, despite the likelihood of a near-term recession, hydrocarbon demand — and prices — will remain strong for years to come; (2) a preference among many larger E&Ps to grow production and free cash flow through acquisition, not aggressive capital spending; and (3) a desire by many smaller, privately held producers (and midstreamers) to cash in now and reap big gains as they do.