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Thursday, December 8, 2022

No New Permits; Nine DUCs Reported As Completed -- December 8, 2022

Active rigs: 43.

WTI: $71.46

Natural gas: $5.962

No new permits.

Nine producing wells (DUCs) reported as completed:

  • 37859, 1,340, CLR, Clear Creek Federal 5-35H,
  • 37860, 1,056, CLR, Clear Creek Federal 10-35H2,
  • 38783, 401, CLR, Bonneville 8-23H,
  • 38784, 1,020, CLR, Bonnevillle 9-23H,
  • 38478, 1,613, WPX, Hall 14-15HZ,
  • 38479, 643, WPX, Hall 14-15HD,
  • 38477, 1,211, WPX, Hall 14-15HIL,
  • 38480, 1,714, WPX, Hall 14-15HY,
  • 35662, 404, Lime Rock Resources V-A, Jore Fed 13H, North Fork,

Huge Energy Stories Today -- December 8, 2022

I read the first headline below and almost fell off the treadmill. 

Biden to double the amount of natural gas the US will export to Europe.

  • link here;
  • Europe will need to import huge volumes of LNG in 2023 (that's next year) -- Trafigura, as reported by Charles Kennedy
  • if Charles Kennedy's story is being published today, the Biden administration had to have known about this for weeks;
  • Germany's off-shore floating LNG import teerminals delayed in construction -- just announced today --

Trafigura profits:

  • link here;
  • commodities trader Trafigura earned a record $7 billion in its last financial year;
  • more than the previous four years combined;

Mexico crude oil production continues to fall;

  • link here;
  • Mexico: production estimated at 1.62 million bopd in November, 2022
  • Mexico's quota per OPEC+ is 1.753 million bopd until December, 2023
  • at the link, a great graphic regarding Russia output vs OPEC output the last two years;

Keystone pipeline shut down:

  • links everywhere
  • near the Kansas-Nebraska border, in Kansas
  • company not releasing how much was spilled

Exxon to expand stock buybacks.

  • link here;
  • expand buyback plan to $50 billion;
  • sees cash flow doubling by 2027;

Gasoline prices plummet to below-year-ago levels.

Transport prices fall at the fastest rate on record.

  • link here.
  • this whole inflation thing is looking more transitory than some would care to admit;

Russian oil:

  • being held up in transit; D5S much more effective that originally thought;
  • Urals grade oil, which accounted for about 60% of the Russia’s seaborne exports over the past year, traded at $43.73 a barrel on Wednesday, two days after D5S sanctions went into effect; link here;
  • remember: only Russian seaborne oil is affected by the D5S sanctions; COBP is not at risk due to sanctions;

OPEC cuts:

  • Gulf producers lead on OPEC+ cuts,
  • Saudi crude output at 6-month low:
  • OPEC production falls by 850,000 b/d,
  • Saudi pumps 10.46 million b/d
  • Non-OPEC boosts output by 150,000 b/d led by Kazakhstan, Russia;
  • link here;

Investors:

  • link here;
  • UBS’s billionaire clients are betting on big gains from energy
    • they’re also seeing opportunities in
    • pharma,
    • biotech, and
    • software,
    • with Asia Pacific excluding mainland China ranking as the top region.
  • my "new money allocation":
    • blue chip: 40%
    • beat down tech: 25%
    • energy (mostly US oil): 20%
    • mRNA (mostly Big Pharma): 10%
    • Daimler Truck: 5%

US Economy; AVGO Increases Its Dividend -- December 8, 2022

What's behind the greatest job market in history? Forbes, December 7, 2022, The article begins:

The deeper we dig, the more we find, especially when we examine the momentum of our job market which, I’ve repeatedly reported, is the best in history.

From my vantage point – independent career coach, job market observer, and columnist for 25+ years – each month’s jobs report from the Bureau of Labor Statistics continues to amaze. After 23 consecutive months, we’re used to seeing high job creation numbers and low unemployment.

The string is not over. Expect more.

Jobless claims, today: link here.

  • slight uptick in claims -- up 4,000 to 230,000 (yawn)
  • continuing claims at a 10-month high; up 62,000 to 1.671 million (yawn)

The market:

AVGO: up $12.58; up almost 2.5%; trading at $531; increases it's quarterly dividend by 12% to $4.60; it was $4.10;

  • over five days: down from $540
  • over six months: down from $541
  • one year: well off its highs, $578
  • pays 3.09%

AAPL:

  • up 1.5%; up $2.09;
  • trading at a very, very low of $143; 52-week range: $129 - $183

CLR Has Fracked The Fuller Wells In Little Knife -- December 8, 2022

It appears the CLR Fuller wells have been fracked. The CLR Fuller wells are tracked here.

This one came off the confidential list Wednesday, October 19, 2022.

  • 38365, conf, CLR, Fuller 5-2H, Little Knife, t--; cum 4K over 6 days; extrapolates to 22K over 30 days; 

The parent well is off line:

  • 20357, IA/629, CLR, Fuller 1-2H, Little Knife, t9/11; cum 289K 7/22; off line while neighboring wells are being fracked;

The Enerplus 10-Well "Game Fish" Pad Is Starting To Report -- December 8, 2022

The "Game Fish" pad is tracked here.

Newer (daughter) wells are starting to be fracked.

Recent production data for an old well in this field:

  • 21754, 654, Enerplus, Grouper 149-94-36D-25H, Squaw Creek, t7/12; cum 351K 10/22;

It's almost like a brand new well.

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20223159565994294959694197802
BAKKEN9-202230543453483364546335271025
BAKKEN8-20222530383033302131931594966
BAKKEN7-20220000000
BAKKEN6-20220000000
BAKKEN5-20220000000
BAKKEN4-20220000000
BAKKEN3-20220000000
BAKKEN2-202222117311983491526101152
BAKKEN1-202231170516895282320149177
BAKKEN12-2021311691177451126851441551
BAKKEN11-2021301606159850826461417564
BAKKEN10-2021311638155051726571374605
BAKKEN9-2021301557170051024901420397
BAKKEN8-2021311566149549025081386454

Covid-19 Update -- December 8, 2022

Updates

December 8, 2022: as Peter Zeihan would say, "the magic of mRNA." Both Moderna and Pfizer have an updated Covid vaccine that "covers" the newest Omicron strains, and which adults are now receiving. Today, the FDA approved these updated Covid vaccines for infant and children > 6 months old. See this link.

Original Post

Link here.


Compare with the US:

To the best of my knowledge, there's only one difference. From what little I know, Japan's restrictions, lock downs, have been much more severe than the US.

I think folks have forgotten why the global restrictions were put in place in the first place.

The Saudi Arabia Page -- December 8, 2022

Earlier:

Saudi Arabia: even before D5S, link here:

More, from The Wall Street Journal:

The Saudi government posted a $27 billion budget surplus Wednesday, December 7, 2022, as this year’s high oil prices accelerate Crown Prince Mohammed bin Salman‘s ambitious plans and boost resource-rich economies across the Persian Gulf.

Buoyant crude prices helped the kingdom’s economy expand at one of the fastest rates globally, with the government spending $47 billion more than planned. In a year when global growth is pegged at 3.2%, the International Monetary Fund predicts growth of 7.6% this year in Saudi Arabia. The kingdom’s output is expected to reach $1 trillion for the first time, cementing its place among the world’s biggest economies.

The boom times have extended to Saudi Arabia’s Gulf neighbors, demonstrating how Russia’s invasion of Ukraine has redrawn the world’s energy maldemic recovery. In Qatar, high natural-gas prices this year have helped cap off a $200 billion investment in infrastructure in the capital Doha, helping the soccer World Cup taking place there this month run smoothly. 

And more:

The Saudi government said revenues increased 28% to $328 billion on higher oil sales this year, with $300 billion predicted for next year. It expects oil prices to remain elevated, or above $80 a barrel, according to Abu Dhabi Commercial Bank. Brent crude, the global oil benchmark, was at roughly $78 a barrel Wednesday, down from a high of nearly $130 earlier this year. That is up from an average of $70.86 a barrel last year and $41.96 a year earlier.

It marks the first period of sustained high oil prices for Prince Mohammed, the 37-year-old who rules Saudi Arabia on behalf of his father. He rose to power during the oil-price crash of 2015 and oversaw a period of austerity measures for average Saudis, even as he pushed ahead with an ambitious program to diversify the country’s economy away from oil.

Break, break.

Prior to seeing this story, I posted this yesterday, when addressing another issue but certainly is worth re-posting here:

Think of it this way. A year ago, there were three actors on the global stage (in the theater of oil):
  • the US
  • OPEC
  • Russia

Today, there are two:

  • the US
  • Saudi Arabia

A year from now, there will still be only two:

  • the US
  • Saudi Arabia

And if the global economy "explodes" in a good way -- a year from now --

  • coming out of a pandemic;
  • coming out of a global recession;
  • the demand for oil might be more than just noteworthy.

But between "now" (tonight to be specific) and "then" (December 7, 2023) it could be quite the exploding Ferris wheel ride. But I think I read something on twitter today to the effect that, that is when fortunes are made.

Looking at that graphic above and making an additional observation: 

Re-Posting: Russia Releases Brittney Griner -- December 8, 2022

Played out as expected.

Biden getting 'er done.

Biden had a great short tweet, making the announcement.

I doubt Biden writes his own tweets but that doesn't matter. 

Ms Griner is on a plane and flying home.

To Abu Dhabi and then flying home.

High-level trade. Arms dealer with 25-year sentence; had already served fourteen years.

Most interesting: huge success story not used as a political surprise. Announcement came after the mid-term elections. Appears to simply be hard-work by the US State Department. Deserves a lot of credit. 

Great, great Christmas present.

Biden will deservedly get a lot of credit for this. 

On another note, from the president in my twitter feed today:

Short Term Vs Long Term -- December 8, 2022

Yesterday a reader asked my thoughts on the divergence between the narrative and the plummeting price of oil. I responded with a long rambling e-mail reply which probably missed the target but essentially came down to the "short term" perspective (traders) that is setting the price of oil versus the "long term" perspective (investors) that is setting the narrative.

In my reply I mentioned that I was looking forward to comments by Josh Young on twittter.

Wow, wow, wow. Less than an hour or so of sending that e-mail, this popped up in my twitter feed:

Brilliant.

PSA: Browsers -- December 8, 2022

My favored / favorite browser is Firefox. 

For the past few months, we've had a lot of problems with Hulu. Incredibly slow to load; sometimes "never" loading. On our 27-inch desktop iMac using Firefox.

On the other hand, Hulu is awesome on the iPad.

After trying various "things" on the iMac -- and none of them working -- I realized that the iPad only uses Safari. I opened Hulu using Safari on the desktop ... and .... everything worked perfectly. It was amazing. Lightning fast. No problems. 

So, if you're having trouble with Hulu and you're using Firefox, switch to Safari. I didn't try Chrome or Microsoft. 

So, now, on Safari, all three performing as advertised -- absolutely better than expected, actually: Hulu, Amazon Prime Video; and Apple TV+.

By the way, Apple TV+ is turning out to be quite a nice platform. Right now the entire Jason Bourne series -- all five episodes -- are featured. Yes, one can get Jason Bourne "everywhere" but it's nice to be on one platform and see this franchise featured, instead of jumping from one streaming service to another streaming service looking for something.

By the way, of the three (Apple TV+, Hulu, Amazon Prime Video), Apple TV+ is the cleanest, easiest to use. I'm quite impressed.

But, of course, I'm an Apple Fanboy. Fanboy #3 was my original handle. 

3Q22 -- RBN Energy; WTI Rises; Always Darkest Before The Dawn -- December 8, 2022

Saudi Arabia: even before D5S, link here:

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

The Far Side: link here.

Active rigs: 43.

WTI: $73.70.

Natural gas: $76.10.

Friday, December 9, 2022: 21 for the month, 130 for the quarter, 674 for the year.
38896, conf, CLR, Bonney 11-3HSL,
38852, conf, Crescent Point, CPEUSC Lowe 4-18-19-158N-99W-MBH,

Thursday, December 8, 2022: 19 for the month, 128 or the quarter,   672 for the year.
38895, conf, CLR, Bonney 10-3HSL1,
38851, conf, Crescent Point, CPEUSC Lowe 5-18-19-158N-99W-MBH-LL,

RBN Energy: natural gas producers shine in another sterling quarter for US E&Ps. Archived.

Storm clouds may be gathering on the economic horizon as concerns about persistent inflation and looming recession roil markets and politics. But for oil and gas producers, the third quarter was the equivalent of a driver putting the top down under a flawless azure sky, dialing up the road tunes, and cruising without a care down an endless highway. Lower oil prices led to a dip in earnings and cash flow after a record-breaking second quarter, but cash still filled producers’ coffers at the second-highest rate in decades. In today’s RBN blog, we review the Q3 results of U.S. E&Ps and discuss what may lie ahead as those storm clouds move closer.

Let's repeat: 

Storm clouds may be gathering on the economic horizon as concerns about persistent inflation and looming recession roil markets and politics. But for oil and gas producers, the third quarter was the equivalent of a driver putting the top down under a flawless azure sky, dialing up the road tunes, and cruising without a care down an endless highway. Lower oil prices led to a dip in earnings and cash flow after a record-breaking second quarter, but cash still filled producers’ coffers at the second-highest rate in decades. In today’s RBN blog, we review the Q3 results of U.S. E&Ps and discuss what may lie ahead as those storm clouds move closer.