Pages

Wednesday, February 1, 2023

Tell Me Again Why Price Of Gasoline Continues To Rise In Texas -- February 1, 2023

Tell me again why the price of gasoline is trending up in Texas?

***********************************
Crude Oil In Storage -- Weekly EIA Report


**************************
Gasoline Demand

Gasoline demand: link here.

 ***********************
US Crude Oil -- Days Supply

US crude oil, commercial, days of supply --  30.5: link here

The number of days of commercial US crude oil: 30.5 days. That's down from 30.8 days last week.
That's still more than four weeks of commercial US crude oil in storage at a time when three weeks is more than sufficient: a) this is not driving season; b) this is not hurricane season; c) gasoline demand is way, way down from historical norms (yes, I know, somewhat of a tautological argument). I need to see days of supply trending toward 24 days before I start to get bullish about increased activity in the oil fields.

***********************
Proved Reserves

Link here.

JPow, The Fed, And Final Comments -- February 1, 2023

Laser-Focused on Dividends

I couldn't possibly be happier.

About a year ago, I actually put together a real investment plan and an element of that investment plan included a focus on dividends. 

My annual dividends have increased 24% year/year. 

Lots of taxes but lots of cash flow.

****************************
Parting Shots

Three things: GDPNow, "disinflation," and, JPow's disposition today.

JPow today: seemed really, really comfortable today. One had the feeling that whether things work out or don't work out, we at least have one adult in Washington. 

Disinflation: link here.

Although they may sound the same, deflation should not be confused with disinflation.
Deflation is a decrease in general price levels throughout an economy, while disinflation is what happens when price inflation slows down temporarily.
Deflation, which is the opposite of inflation, is mainly caused by shifts in supply and demand.
Disinflation, on the other hand, shows the rate of change of inflation over time. The inflation rate is declining over time, but it remains positive.
Deflation: bad. Disinflation: good.

GDPNow: link here.  

***************************
Earlier Post

Re-posting. Posted earlier today:

Most folks did not hear JPow using this word, but he used it more than once. 

Fed rate:

  • up twice more this year unless things get appreciably worse;
  • 25 bp today and 25 bp twice more this year
  • Americans have gotten use to current Fed rate
  • current Fed rate is the new floor for the foreseeable future
  • which means: that another 75 bp increase by end of year is a non-event
  • so many opportunities to be hawkish -- and never took the bait
  • 25 bp in March and then pause and / or one more 25 bp before summer

Jobs:

  • finally seeing some clearing of the "fog" regarding jobs
  • all good news
  • analysts spent too much time on jobs
  • JPow seemed much less concerned about jobs

Covid-19:

  • it's over; get over it

JPow:

  • seems comfortable
  • no longer angry

The only worry:

  • GOP delays raising the debt ceiling
  • the debt ceiling will be raised but the concern is if the government defaults for even one hour -- the message that would send

Dow:

  • down as much as 300 points before JPow spoke
  • now, Dow is up almost 100 points
  • technology stocks leading
  • NASDAQ positive more than 2%
  • investors seem "more with it" than the analysts
  • ignore the analysts; watch the market
  • US dollar "sinking" -- in the current environment -- good to see

Thursday Earnings — Happy Days Are Here Again — Well, At Least For The Moment — The Word For The Day: Disinflation -- February 1, 2023

Dalio: trust JPow.

Phil: six more weeks of winter.

Productivity number: one of the best ever!! Employee costs come in lower than expected. Dow turns green, but now red.

Fed rate: risk of rate going higher than 5% goes way down. Fed rate may go up another 25 to 50 bp but that’s simply a rounding error (“their” words, not mine). Dow red again but S&P green.

“Disinflation”: https://newsletters.yahoo.net/H/2/v60000018611c915e4b02a07f4bbcfbb48/9271800a-e8a3-4386-9d71-53b9ef5ea876/HTML.

ECB; increases rate by 50 basis points, and sounds like “much” more yet to come” on top of high energy prices; EU markets all up today.

NYC is importing huge amounts of gasoline: fears summer shortage! Link: https://twitter.com/BrianGitt/status/1621134531913998337.

Global oil demand going forward, hugehttps://twitter.com/Rigzone/status/1621131422172856323.

Global natural gas demand: no sign of slowing. Link: https://twitter.com/SStapczynski/status/1621091781269164032.

US diesel: production could surge — https://www.eia.gov/todayinenergy/detail.php?id=55399&utm_source=Twitter&utm_medium=EIAsocial&utm_id=FirstUpdate.

Selected companies:

  • Eli Lilly (LLY): before market open; $1.78; $1.94 vs $1.83; huge beat on EPS; $2.00, but misses on top line (sort of); great guidance; type II diabetes drug “through the roof”; obesity drug also unprecedented results; easy to find volunteers for more studies required by FDA.
  • COP: before market open; $2.18; $2.86 vs $2.72; misses by 19 cents; declares regular dividend of 51 cents; variable, 60 cents.
  • CAH: before market open; $1.14; $1.21 vs $1.13; actual, $1.32: revenue also beat (Zacks); 
  • GOOGL: after market close; $1.18; $1.14 vs $1.14;
  • AMZN: after market close: 17 cents; 19 cents vs 15 cents;
  • AAPL: after market close: $1.94; $1.96 vs $1.93;
  • SBUX: after market close, 77 cents; 81 cents vs 77 cents;
  • QCOM: after market close, $2.35; $2.42 vs $2.35.
  • HSY: $1.77; time not supplied; $1.82 vs $1.78;
  • F: 62 cents; time not supplied; 57 cents vs 60 cents;

META: up $29 in pre-market trading. Thursday morning; day after JPow’s remarks.

COP / APLNG

    • after picking up an additional 10% interest in APLNG last February, COP is likely to see a $600-plus million distribution from the asset in Q4
    • that will be a bright-spot in a quarter where, sequentially, oil and gas prices were lower. However, COP's full-year FY22 earnings are likely to come in ~$14/share. 
    • perhaps more interesting is what COP decides to do with its variable dividend - which, last quarter, was $0.70/share. My estimate is for a variable dividend declaration of $0.56/share.
  • APLNG:
    • from wiki:
      • Australia Pacific LNG, Queensland, Australia Australia Pacific LNG (APLNG) is an incorporated company owned by Origin Energy, US giant ConocoPhillips and China's Sinopec.
      • The project consists of development of Australia Pacific LNG's gas fields in the Surat and Bowen Basins, construction of a 530 km gas transmission pipeline from the gas fields to an LNG facility on Curtis Island and construction of an LNG facility on Curtis Island.
      • On 26 October 2017, gas producer and exporter APLNG entered into a sales agreement with Origin Energy, to supply 41 petajoules of gas under a 14-month contract starting 1 November 2017. The contract brings the company's total commitment to 186 PJ for 2018, representing almost 30% of Australian east coast domestic gas market demand.

This Is Absolutely Crazy -- I Never Realized It Was This "Bad" -- February 1, 2023

Link here.


 
Workers in the U.S. are spending more time in the office again, with occupancy rates surpassing 50% for the first time since the start of the Covid-19 pandemic.

Average office use last week was 50.4% of early 2020 levels in 10 major U.S. cities.
It is the first time office occupancy has topped 50 since March 2020, when Covid-19 forced most workplaces to temporarily shut down.

All 10 of the major cities it tracks surpassed 40% for the first time.

Workers are still staying home ahead of the weekend, however. Offices are emptiest on Friday and they are the most crowded on Tuesdays. In New York, for example, occupancy rates dropped to 26.5% on Friday from 59.8% on Tuesday.

Truly amazing. 

I'm getting less and less concerned about the "southern surge" every day.

Seven New Permits; Eleven Permits Renewed; Nine Permits Canceled; And Four DUCs Reported As Completed -- February 1, 2023

Active rigs: 47. Link here.

WTI: $76.93.

Natural gas: $2.50

Seven new permits, #39620 - #39626, inclusive:

  • Operators: Crescent Point Energy (6); WPX
  • Fields: Winner (Williams); Van Hook (Mountrail)
  • Comments:
    • Crescent Point Energy has permits for six CPEUSC wells (Clermont, Farthing, two Ruby wells, two Matilda May wells), NWNE 30-158-100; 
      • to be sited 300 FNL and between 1670 FEL and 1795 FEL; 
    • WPX has a permit for a State of ND well, SESE 10-150-92, 
      • to be sited 498 FSL and 1233 FEL;

Eleven permits renewed:

  • CLR (8): eight Gordon Federal wells, SWNW 8-148-97; Haystack Butte, Dunn County;
  • MRO (2): a Storedal permit and a Satrum permit, both in Killdeer oil field; Dunn County;
  • Oasis: an MHA permit in Heart Butte oil field, Dunn County;

Nine permits canceled:

  • Crescent Point Energy (5): two Burgess permits; a Sylven permit; and two Dois permits, in Winneer, Ellisville, and Rainbow oil field, Williams County;
  • Enerplus (4): a WM Brown, an Ann H. Thome, a Fort Berthold, and an LK-Quilliam permit, two in Williams County; and, two inn Dunn County.

Four producing wells completed:

  • 35971, 1,446, XTO, Skarpsno Federal 22X-20AXD,
  • 35972, no ip provided, XTO, Skarpsno Federal 22X-20E,
  • 35973, 5,082, XTO, Skarpsno Federal 22X-20B,
  • 35974, no ip provided, XTO, Skarpsno Federal 22X-20F, 

Parent wells:

  • 20140,
  • 20142,

Updating Two Oil Fields: Dollar Joe And West Capa -- February 1, 2023

The usual disclaimer applies.

The Kiefel wells in West Capa, three pads: a singleton; a 2-well pad; and, a 3-well pad:

  • 21894, 707, CLR, Kiefel 1-36H, t4/12; cum 268K 12/22;
  • 38985, conf, CLR, Kiefel 2-36HSL, West Capa,
  • 38986, conf, CLR, Kiefel 3-36H, West Capa,
  • 39157, conf, CLR, Kiefel 4-36H, West Capa, 
  • 38158, conf, CLR, Kiefel 5-36H, West Capa, 
  • 39159, conf, CLR, Kiefel 6-36H, West Capa,

The Woodrow wells in West Capa, three pads: a singleton and two 3-well pads:

  • 18894, 870, CLR, Woodrow 34X-32H, West Capa, t5/11; cum 208K 12/22;
  • 39083, conf, CLR, Woodrow 2-32H, West Capa, 
  • 39084, conf, CLR, Woodrow 3-32H1, West Capa, 
  • 39085, conf, CLR, Woodrow 4-32H, West Capa,
  • 39099, conf, CLR, Woodrow 7-32H, West Capa, 
  • 39098, conf, CLR, Woodrow 6-32H, West Capa, 
  • 39097, conf, CLR, Woodrow 5-32H, West Capa,

The Allen 21X wells:

  • 18893, 1,142, CLR, Allen 21X-17
  • 28939, 1,172, CLR, Allen 21X-17A
  • 28940, 1,280, CLR, Allen 21X-17E
  • 28941, 1,245, CLR, Allen 21X-17B
  • 28942, 605, CLR, Allen 21X-17F

Just to the west of the Allen 21X wells, and probably why the above wells recently taken off line:

  • 39090, conf, CLR, Colette 2-18HSL, Dollar Joe,
  • 21899, IA/1,591, CLR, Colette 21X-18, Dollar Joe,  t3/12; cum 286K 7/22; recently taken off line; still off line;
  • 39091, conf, CLR, Colette 3-18H, Dollar Joe,

  • 39087, conf, CLR, Colette 4-18H, Dollar Joe,
  • 39088, conf, CLR, Colette 5-18H, Dollar Joe,
  • 39089, conf, CLR, Colette 6-18H, Dollar Joe,

 ***************************
Updating Dollar Joe And West Cap

A reader asked me too update the Dollar Joe and West Capa oil fields. I will do that to some extent but that's a large area and I haven't updated either field in a long time, so it will take some time. I've added the file numbers of all the permits that have been added to Dollar Joe since 2017 but much more yet to be done. If there's a particular well of interest, or a particular section, let me know.

So, let's begin. First, the maps:




 





Now, the pads:

  • 39507, ros, CLR, Vance 2-14H, Dollar Joe,
  • 39508, conf, CLR, Vance 3-14H, Dollar Joe,
  • 21898, 1,088, CLR, Vance 31X-14, Dollar Joe, t3/12; cum 146K 12/22; 
  • 39509, conf, CLR, Vance 4-14H, Dollar Joe,

 

 

  • 39175, ros, CLR, Clyde Hauge 4-13H, Dollar Joe,
  • 39176, conf, CLR, Clyde Hauge 5-13H, Dollar Joe,
  • 39178, conf, CLR, Clyde Hauge 6-13H, Dollar Joe,


  • 39287, conf, CLR, Smouse 9-28H, West Capa,
  • 39286, ros, CLR, Smouse 8-28H, West Capa,
  • 39285, conf, CLR, Smouse 7-28H, West Capa,
  • 39284, conf, CLR, Smouse 6-28H, West Capa,


  • 30917, 465, CLR, Smouse 31X-28DXA, West Capa, t32/16; cum 1471K 12/22;
  • 39286, conf, CLR, Smouse 8-28H, West Capa,
  • 30665, 376, CLR, Smouse 31X-28H, West Capa, t3/16; cum 99K 12/22;
  • 30664, 603, CLR, Smouse 31X-28D, West Capa, t3/16; cum 98K 12/22;
  • 30652, 752, CLR, Smouse 31X-28C, West Capa, t3/16; cum 147K 12/22;
  • 17823, 617, CLR, Smouse 31X-28, West Capa, t7/09; cum 130K 12/22; 

Getting Caught Up -- Odds And Ends -- February 1, 2023

1. A reader had a question about the new Gladys permits; answer now provided at the link.

2. A reader asked me too update the Dollar Jim and West Capa oil fields. I will do that to some extent but that's a large area and I haven't updated either field in a long time, so it will take some time. I've added the file numbers of all the permits that have been added to Dollar Jim since 2017 but much more yet to be done. If there's a particular well of interest, or a particular section, let me know.

3. Now, for some EIA data that is released after the weekly petroleum reeport.

4. Gasoline demand: link here.


5. US crude oil, commercial, days of supply --  30.5: link here

The number of days of commercial US crude oil: 30.5 days. That's down from 30.8 days last week.
That's still more than four weeks of commercial US crude oil in storage at a time when three weeks is more than sufficient: a) this is not driving season; b) this is not hurricane season; c) gasoline demand is way, way down from historical norms (yes, I know, somewhat of a tautological argument). I need to see days of supply trending toward 24 days before I start to get bullish about increased activity in the oil fields.

The Fed -- Couldn't Possibly Have Been More Dovish -- February 1, 2023

Most folks did not hear JPow using this word, but he used it more than once. 

Fed rate:

  • up twice more this year unless things get appreciably worse;
  • 25 bp today and 25 bp twice more this year
  • Americans have gotten use to current Fed rate
  • current Fed rate is the new floor for the foreseeable future
  • which means: that another 75 bp increase by end of year is a non-event
  • so many opportunities to be hawkish -- and never took the bait
  • 25 bp in March and then pause and / or one more 25 bp before summer

Jobs:

  • finally seeing some clearing of the "fog" regarding jobs
  • all good news
  • analysts spent too much time on jobs
  • JPow seemed much less concerned about jobs

Covid-19:

  • it's over; get over it

JPow:

  • seems comfortable
  • no longer angry

The only worry:

  • GOP delays raising the debt ceiling
  • the debt ceiling will be raised but the concern is if the government defaults for even one hour -- the message that would send

Dow:

  • down as much as 300 points before JPow spoke
  • now, Dow is up almost 100 points
  • technology stocks leading
  • NASDAQ positive more than 2%
  • investors seem "more with it" than the analysts
  • ignore the analysts; watch the market
  • US dollar "sinking" -- in the current environment -- good to see

It's Hard Not To Be Amazed -- February 1, 2023

There are traders and there are investors.

Link here.

ExxonMobil reported on Tuesday $55.7 billion in earnings for 2022 in a record-breaking earnings tally for any Western oil supermajor ever.

Exxon said today it generated earnings of $55.7 billion and $76.8 billion of cash flow from operating activities in 2022 “by leveraging an advantaged portfolio and delivering strong operational performance.”

High oil and gas prices were the key reasons for higher profits at Exxon, which beat its own annual earnings record of $45.2 billion from 2008 – when oil prices hit a record $142 per barrel – and posted the highest-ever annual profit by a major Western oil firm.

I first started accumulating shares of XOM on March 23, 1989. I have never sold. Only accumulated. Every quarter. Every year.


I've always preferred CVX to XOM. I bought Texaco about the same time as I bought XOM back in 1989, and Texaco eventually morphed into CVX. I've told the Texaco story many, many times. One of my top five investment stories ever. Let's compare:

Dividend / pays:

  • XOM: 3.2%
  • CVX: 3.6%

Taps For TAPS -- We're That Close -- Biden Vs COP -- February 1, 2023

Reminder: May 30, 2021: why President Biden approved COP's giant Willow Field in Alaska. It was all about saving the TAPS -- a national security issue

The Willow project: is all about saving TAPS.

President Biden could lose another pipeline -- though killing COP's Willow exploratory project would not result in loss of TAPS during Biden's first term but it could during Biden's second term.

My two cents: COP needs to go nose-to-nose with Biden administration -- "five or nothing; and nothing means the end of TAPS." 

Re-posting: 

Alaska: COP might get its 3-well project. Alaska is tracked here.

      • Willlow project on North Slope
      • 600 million bbls; $8 billion
      • COP wants 5-well exploration project
      • Biden willing to go to 3-well program -- COP says anything less is uneconomical
      • if no decision quickly, summer 2023 drilling program dead
    • Biden says "okay" but bureaucrats hold the sealed envelope with the final decision. Me? The story is a political story, not an energy story -- except for COP which is running out of oil plays.

Willow by the numbers:

  • 600 million bbls recoverable
  • 200,000 bopd production
  • 3,000 days of production
  • ten years of production
  • global production: 200,000 bopd / 100 million bopd = 0.2%
  • US production: 200,000 bopd / 12 million bopd = 1.6%
  • Permian production: 200,000 bopd / 3.5 million bopd = 5.7%

Guyana-Suriname Basin: rise from obscurity to super potential, WorldOil, May, 2021.

  • estimates of 10+ billion bbls of oil
  • estimates of 30 tera cubic feet of natural gas

July 1, 2016: this ExxonMobil - Guyana story is getting a lot of press. This may be quite a story:

ExxonMobil and its partner Hess Corp. have announced that the major discovery off the coast of Guyana, is a discovery that is much larger than previously expected.
The Liza field could turn out to be the largest oil discovery reported in two years and the companies say that it could cost $18 billion to develop.
Exxon describes it as a “world-class discovery with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels.”
That could amount to as much as half of the entire volume of oil discovered across the entire industry in 2015.

 Update: link here.

More background data, from the EIA, April 26, 2021: 

"Shallow And Delayed" -- European De-Industrialization -- February 1, 2023

Yahoo!Finance morning brief: "shallow and delayed."

****************************
European De-Industrialization

Themes: link here

European de-industrialization:

We started talking about European de-industrialization last year (2022). The story is now being picked up by edgier sites and will eventually become a mainstream media business story. 

Biden got the message, signing off on two huge MAGA bills:

  • "the chip act"
  • "IRA" -- the inflation reduction act -- in fact, an end to the globalization movement that was begun under the Bill Clinton administration

The US has three advantages:

  • an entrepreneurial spirit
  • unlimited, inexpensive, accessible, multiple sources of energy
  • relative to rest of world: population growing; young, smart workers

Now, this, today, link here

The Barnum & Bailey And The Biden Family Circus, Part 2: Wednesday, February 1, 2023

Recession talk: continues. "Shallow and delayed."

JOLTS: this is simply incredible. Link here. For December, 2022, JPow's policies not destroying the job market as fast as he wants. It's an interesting recession -- job openings surging and hires "maintained."

  • The number of job openings increased to 11.0 million on the last business day of December, the U.S. Bureau of Labor Statistics reported today. 
  • Over the month, the number of hires and total separations changed little at 6.2 million and 5.9 million, respectively. 
  • Within separations, quits (4.1 million) and layoffs and discharges (1.5 million) changed little. 
  • In December, the largest increases in job openings were in accommodation and food services (+409,000), retail trade (+134,000), and construction (+82,000). 
  • The number of job openings decreased in information (-107,000).
  • Hires In December, the number and rate of hires changed little at 6.2 million and 4.0 percent, respectively. Hires changed little in all industries.

Weekly EIA petroleum report, link here:

  • US crude oil in commercial storage increased by a whopping 4.1 million bbls; crude oil in storage now a whopping 4% above the five-year average. Who wudda thought -- all that talk about peak oil in the 1990s;
    • days supply will be reported later; currently running at historic highs -- greater than four weeks of crude oil supply;
  • US imports of crude oil, actually showed a healthy increase, up over 7 million bopd last week; one generally sees a 6-handle on imports, so 7.3 million bopd imported is interesting;
  • refiners operating at 85.7%
  • gasoline and distillate fuel production both increased last week
  • distillates in storage increased by 2.3 million bbls but still remain 17% below the 5-year average, though that's better -- barely -- than the usually reported 20% below the 5-year average
  • jet fuel delivered -- this is the most important metric -- was up -- but just barely -- up 0.6% compared with same four-week period last year -- business travel not yet returning.

WTI: drops fourteen cents; trading at $78.73. 

**************************
Hawaiian Shirts

Incredibly nice brand. Best found to date. 

Barnum & Bailey And The Biden Family Circus, Part 1: The Three-Ring Circus Today With "The Fed" In The Center Ring -- February 1, 2023

EPD: link here.

The circus today:

  • the center ring: the Fed announcement today
  • the small left-side ring: weekly EIA petroleum report
  • the small right-side ring: Brady -- but that show is over

Brady: another job opening. The GOAT announces retirement -- "for real this time." Will become CFO for Cathie Wood's ARK innovation ETF fund. Some or all of this may be inaccurate. No source.

Ukraine: US readying another $2 billion aid package. 

Recession:

INTC: most egregious news today -- Intel "implodes" and CEO, directors take "small pay cut" and apparently staggered. INTC up almost a percent today.   

AMD: up 8%.

Texas grid: holds, but huge ice storm today could knock out transmission lines. 

  • Everything still shut down in great state of Texas -- okay -- everything shut down in our neighborhood -- LOL.

Alaska: COP might get its 3-well project. More on this later, perhaps. Alaska is tracked here.

  • Willlow project on North Slope
    • 600 million bbls; $8 billion
    • COP wants 5-well exploration project
    • Biden willing to go to 3-well program -- COP says anything less is uneconomical
    • if no decision quickly, summer 2023 drilling program dead
  • Biden says "okay" but bureaucrats hold the sealed envelope with the final decision. Me? The story is a political story, not an energy story -- except for COP which is running out of oil plays. 

So, this is what we have, link here:

  • Trinidad and Tobago: Shell.
  • Surinam: Apache and TTE.
  • Guyana: XOM.
  • Venezuela: CVX.

Where's COP? The Permian, which some folks say has reached peak production.  

Right on cue: see RBN Energy below. 

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

Active rigs: 46.

The Far Side: link here.

WTI: $78.58.

Natural gas:$2.604.

Thursday, February 2, 2023:
39074, conf, Crescent Point, CPEUSC Szarka 4-36-25-159N-100W-MBH,
39071, conf, Resonance Exploration, Resonance Fylling 3036H,
39034, conf, CLR, Rhonda 11-28H,
38409, conf, Whiting, Kannianen 11-5TFHU,
38164, conf, Hess, BB-Budahn A-150-95-0403H-11,

Wednesday, February 1, 2023: 1 for the month; 71 for the quarter, 71 for the year
39075, conf, Crescent Point Energy, CPEUSC Szarka 3-36-25-159N-100W-MBH, 

RBN Energy: Permian M&A widening the gap between the major and minor players. Archived.

“Top-tier rock, massive scale, and ever-improving efficiency” — that’s the mantra of the largest publicly held E&Ps in the Permian, many of which have only added to their heft during the pandemic/post-pandemic era by acquiring complementary production and midstream assets from private equity funds and old-time oil-and-gas families.

Yes, it’s either/or time in the U.S.’s leading oil and gas basin: Either you get bigger, high-grade the acreage you control and supercharge your free cash flow (and your stock buybacks and dividends) or you accept your fate as an also-ran or, if you’re lucky, an acquisition target.

Just last week, Matador Resources announced a $1.6 billion deal to acquire Advance Energy Partners, which will boost Matador’s Delaware Basin output by 25% and give it a foothold in the Permian’s big-boy league. In today’s RBN blog, we discuss this and other recent asset acquisitions in West Texas and southeastern New Mexico and what they say about the Permian’s future.

A year ago we said the upstream oil and gas sector was in the midst of the most impactful wave of corporate consolidation since the turn of the century, when a plunge in oil prices spurred mega-deals that helped to form many of today’s supermajors. Well, the M&A wave that started in mid-2020 may have crested but it’s still rolling in. 

In 2022, we returned again and again to the growth-through-acquisitions story, which often had a Permian angle. We focused on the series of Permian-related deals (five totaling more than $1.8 billion) that Earthstone Energy had completed in 2021 and early 2022 to significantly expand its role in both the Midland and Delaware basins. Last summer, it closed on a sixth: the $627 million acquisition of Titus Oil & Gas assets in the northern Delaware. Then we looked at Devon Energy’s extensive “portfolio renewal” program, which last year included a number of major acreage trades in the Delaware that unlocked more than 200 extended-reach drilling locations previously constrained to one-mile developments. (Devon is among the top E&Ps in the Permian, with production averaging 421,000 barrels of oil equivalent per day, or 421 Mboe/d, as of Q3 2022.)

Kraken To Drill Three Extended Long-Lateral Gladys Wells In Rainbow Oil Field -- February 1, 2023

Updates

February 1, 2023: first comment, below, from a reader --  

I have the mineral rights to 28457 which is Gladys 1-20H.  Are these drilling permits going to have any affect to my lease, or better yet, how would I find this information ?

There are some nuances with regard to that question to which I'm not sure. So take my reply with a grain of salt.

This is how I would approach this new information:

1. Any Bakken landman would be more than happy to answer your question. I will post contact information for a couple of landmen later. If you contact, you will be placed on their mailing / contact llist and they will contact you periodically.

2. All things being equal, the value of your mineral acreage has gone up significantly, but the appreciation will start to decline once these wells start producing.

3. Your existing lease will not be affected, except as noted in paragraph 2 above. But, the lease per se is not affected. 

4. You will "participate" in these new wells. Your minerals associated with #28457 is based on 1280-acre spacing. The new permits are now on confidential status so I don't know the size of the spacing unit, but I assume the spacing unit for two of the wells: 1920 acres and the section line well twice that, or 3840 acres. 

5. Bottom line:

  • unless you want to participate in the actual drilling of the new wells, not only do you have nothing to do, but even if you wanted, there is really not much you could do;
  • expect increased interest in your minerals now that Kraken has telegraphed it plans to drill more wells here;
  • your percent of the oil production from these new wells will be "figured" over 1920 acres for two of the wells, and over 3840 acres for the section line well (assumption only; wells are confidential, so I don't know spacing unit size)
  • once permitted, Kraken has a year to show activity with regard to drilling, but can renew the permit annually by paying a $100-renewal fee

Disclaimer: I have neither formal training nor personal experience with regard to the question(s) asked by the reader. This is my opinion only. If this is important to you, go to a) the source, and/or b) to professionals. My thoughts are based on very, very limited information. Take this as "education" only and not investing advice.

Original Note

From earlier this week, Kraken with three new Gladys permits in Rainbow oil field.

These will be extended long lateral (3-section / 3-mile lateral) wells:

Four New Whiting Sanish Permits -- A Closer Look -- February 1, 2023

From today's daily activity report;

Four new permits, #39616 - #39619, inclusive:

  • Operator: Whiting
  • Field: Sanish (Mountrail)
  • Comments:
    • Whiting has permits for four DE YK / DE YK Federal permits, SWNW 33-154-92; 
      • to be sited 337 FWL and between 1552 FNL and 1642 FNL.

Based on names of other wells in the area, "DE" stands for "Double Eagle." Two of the wells will end "under" Federal or state land. 

These locations are not yet shown on the NDIC map, but here they are: