Good luck to all! See you in the morning.
My reading tonight: Apple Silicon.
Tuesday, June 6, 2023
Bud -- More On This Next Week -- June 6, 2023
Locator: 44858BUD.
Updates
June 7, 2023:
Original Post
Tabloid:
Reality, on a lackluster day on the market:
Fourteen Wells On Each Of Two 1280-Acre Units -- Bear Den -- Croff -- PetroShale -- NDIC Hearing Dockets -- June, 2023
Locator: 44857B.
The cases (not permits):
- 30190, PetroShale, Bear Den-Bakken, on an existing 1280-acre unit, sections 30/31-149-95, fourteen wells, McKenzie County.
- 30191, PetroShale, Croff-Bakken, on an existing 1280-acre unit, sections 13/14-149-96 fourteen wells, McKenzie County.
Multiple Wells In Overlapping Units -- Last Chance -- CLR -- NDIC Hearing Dockets -- June, 2023
Locator: 44857B.
The case (not a permit):
- 30154, CLR, Catwalk and/or Last Chance-Bakken, amend, i) establish an overlapping 640-acre unit, S/2 of sections 4/5-153-100; three wells; ii) establish an overlapping 1600-acre unit, sections 28/33-154-100 and N/2 of section 4-153-100, five wells; iii) establish an overlapping 1600-acre unit, sections 29/32-154-100 and N/2 of section 5-153-100; six wells; iv) establish an overlapping 1920-acre unit, S/2 of sections 4/5 and all of sections 8/9-153-100, one well; Williams and McKenzie counties.
From the NDIC hearing dockets:
Multiple Wells In Overlapping Units -- Little Muddy -- Crescent Point Energy -- NDIC Hearing Dockets -- June, 2023
Locator: 44856B.
The case (not a permit):
- 30153, Crescent Point Energy, Little Muddy-Bakken, amend; i) six overlapping 1920-acre units; four wells on each overlapping unit; 24 wells; four overlapping 3840-acre units, one well along the section lines; Williams County;
From the NDIC dockets:
The map:
- number of wells:
- so, in each of the six standup 1920-acre spacing units: 4 wells
- 4 x 6 = 24 wells
- then, between "existing" spacing units in the 3840-acre spacing unit, one well -- I don't know if that's four, six, or more?
- existing wells:
Eleven New Permits -- June 6, 2023
Locator: 44855B.
From social media: link here. Note CHRD below (Oasis + Whiting).
From social media: link here.
*********************
Back to the Bakken
Active rigs: 36.
WTI: $71.54.
Natural gas: $2.265.
Eleven new permits, #39946 - #39956, inclusive:
- Operators: Hess (6); Oasis (4); Resonance Exploration.
- Fields: Big Butte (Mountrail); Alger (Mountrail); Bull Butte (Williams); Bonetrail (Williams); and, Sergis (Bottineau)
- Comments:
- Hess has permits for three EN-Wefald wells and three EN-Heinle wells, NENE 25-156-94;
- to be sited 824 FNL and between 1118 FEL and 1283 FEL; Big Butte oil field, Mountrail County;
- Oasis has permits for four Archerfield wells in SWSE 16-156-102; three are in Bull Butte oil field and one is in Bonetrail oil field;
- to be sited between 383 FSL and 482 FSL and 2352 FEL;
- Resonance Exploration has a permit for EOR, Resonance Lodoen 12-36H injection, NWSW 36-163-80;
- to be sited 1838 FSL and 554 FWL.
One permit canceled:
- 37533, MRO, Rutledge 14-33H, Dunn County;
Two producing wells (DUCs) reported as completed:
- two CLR Kelling wells
- 39043, 1,051, CLR, Kelling 3-4H, Jim Creek,
- 39044, 1,035, CLR, Kelling 4-4H, Jim Creek,
- the parent well is #18836; drilled in 2010; 225K 10/22; offline
- these wells are just east of the Micahlucas wells that are on DRL status
MDU - Applied Digital Data Center -- Ellendale, North Dakota -- June 6, 2023
Locator: 44854B.
How much electricity do data centers use? A lot.
Southeast North Dakota.
Website here. Background here.
Besides electricity, what do these data centers use / need in huge numbers?
"Name" in the news closely connected with data center platforms? Nvidia. See this note.
Apple's Headset -- 5,000 Patents -- But First, Breaking News In Golf -- Trump Calls It A “Glorious” Merger — June 6, 2023
Locator: 44853AAPL.
Holy mackerel, breaking. Huge story. This speaks volumes.
I noticed it during the Master's and/or the PGA Championship. Both tournaments were duds as far as I was concerned. I wasn't interested in watching either after the first day.
Why? Both tournaments were missing the "big names" in professional golf.
My hunch: TV viewership of the PGA has dropped significantly with the loss of these big names.
Phil's fingerprints are all over this.
Trump supports merger. Remember, Trump is a huge golfer.
Locator: 44853AAPL.
Definition of a "tell," from wiki:
A tell in poker is a change in a player's behavior or demeanor that is claimed by some to give clues to that player's assessment of their hand.
A player gains an advantage if they observe and understand the meaning of another player's tell, particularly if the tell is unconscious and reliable.
Sometimes a player may fake a tell, hoping to induce their opponents to make poor judgments in response to the false tell. More often, people try to avoid giving out a tell, by maintaining a poker face regardless of how strong or weak their hand is.
A change in a player's behavior.
"Faking a tell" never works.
Yesterday, during Tim Cook's Apple WWDC, there was a "tell." A huge tell.
Can you guess what it was?
Hint:
- a significant change in "behavior" by the Apple CEO (Steve Jobs, now Tim Cook) when introducing a new product
Other links:
- The WSJ: Bobowsky and Tilley.
- The WSJ: Joanna Stern.
- The Washington Post: Molly Roberts.
Won't be available until early 2024?
Apple doesn't release sales breakdowns for "wearablers."
Apple's headset is different than all the rest. And Mark Zuckerberg knows it.
2023: for developers.
2024: for early adopters.
2030: for the rest of us.
Drivers and autonomous cars: a natural fit? Especially for long-haul truckers?
*******************
Tim Cook: A Shot Across The Bow
Mentioning these two data points more than once during the keynote speech was a shot across the bow of any competitor who might want to challenge the Apple headset one-on-one:
- decades to develop; and,
- 5,000 patents
Taking A Break -- Going Biking -- June 6, 2023
Locator: 44852INV.
So much more to blog; can't keep up.
I add "new money" to my portfolios during the second and fourth week each month, so this month the timing seems to be perfect.
We need to see the dust settle after the two big stories broke this week: Saudi oil and Apple.
Good luck to all.
Odds And Ends -- June 6, 2023
Locator: 44851INV.
BUD: link here. Not yet, but looking very, very tempting. BUD does not meet my investing criteria but sometimes things look too good to ignore. Reminder: the rest of the western world is much more progressive / woke than the US.
From the linked article:
The stock market’s reaction has also been unsubtle: Since the end of March, AB InBev shares are down 17.8%, and those of Molson Coors are up 23.6%. This looks excessive for multiple reasons. For one, it doesn’t seem to take into account the highly global nature of the company, which was formed through multiple mergers between Belgian, Latin American and American brewers, and now accounts for roughly one out of every four beers sold worldwide. [25% of all beer sold globally is sold by BUD.]
Last year, 71% of its revenue came from outside North America. Growth has also been coming from other regions. In 2022, even before the Bud Light fracas, North America saw a 4% decline in organic sales volume while all other regions saw increases. South America grew by 4.6%, for example.
Within North America, the company’s portfolio extends well beyond its Budweiser and Bud Light brands to labels such as Michelob and Hoegaarden, as well as microbrewery brands like Goose Island.
Here again, Bud Light hasn’t been the growth driver.
Michelob Ultra, a low-calorie beer marketed as fitting with an active lifestyle, increased sales in the “high-single digits” last year, the company has said.
On a conference call with analysts May 4, AB InBev Chief Executive Michel Doukeris said the total retail sales decline in Bud Light over the first three weeks of April was equivalent to around 1% of global sales by volume over the period, making a nearly 18% stock decline look dramatic indeed.
3M: bankruptcy and 3M in the same sentence is never a good sign. Link here.
In looking at a more Dow-focused market, Cramer highlighted several stocks that roared on Friday, including technology company 3M and construction manufacturer Caterpillar.
After flying high on Friday, 3M was down more than 4% at Monday’s close. 3M is in the middle of a cancer-causing “forever chemical” ground contamination lawsuit, which was postponed on Friday, likely to give both parties more time to reach a settlement.
Cramer is optimistic the settlement will not bankrupt the company, and that its stock will perform well once the litigation is over.
Cramer believes Caterpillar is largely misunderstood by Wall Street, with traders treating it like an old-fashioned cyclical stock. He noted that the company has been successfully diversified by CEO Jim Umpleby into a business that’s less reliant on the global economy, even though traders kept the stock running high on Friday, citing China’s stimulus plan. But that country represents less than 5% of the company’s current business.
Goldilocks: Jim must be reading the blog. From the same link, Cramer mentions a "Goldilocks" report.
Although Cramer chalked up most of the Dow’s Friday (June June 2, 2023) success to the debt ceiling compromise, he also pointed out that nothing exists in a vacuum — the “Goldilocks” labor report may also be a factor in last week’s Dow rally, as well as China’s stimulus package, he said. However, if not for the deal, the Federal Reserve might still be feeling pressure to pass steep hikes at their next meeting, which would throw the market out of whack, Cramer added.
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.
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.
XOM: Could Double Shale Production With New Technology, Completion Strategies -- June 6, 2023
Locator: 44850B.
From a reader:
Funny they bring up fracking & refracs in this Exxon article (see below).
We haven’t seen any refrac activity on any of our mineral tracts in any of about nine counties since 2919. That’s not how good operators run wells that have been & still are above great rocks with more OIP/oil in place.
Thing is it’s good for oil & gas interest asset owners & operators to leverage wells that have fallen to slower production. I agree with Exxon that a lot of oil is being left in the rocks & frac technology can be leveraged on new & existing wells, a win/win for ND & all involved in my honest opinion.
Good topic to review possibly on your blog. I may have missed some articles, not certain. I can’t be the only owner not seeing refracs since Covid struck? 🧐😉ExxonMobil: New Fracking Technology Can Double Oil Outputhttps://oilprice.com/Energy/Energy-General/ExxonMobil-New-Fracking-Technology-Can-Double-Oil-Output.html
I had a note on this subject in draft for several days before getting the note above from that reader yesterday.
Here's my reply:
Poorly written but I want to get this subject off my desktop. I think folks will understand what I'm trying to say, though poorly written. It was written quickly in an "In 'N Out" hamburger restaurant in Richardton, TX, yesterday, while waiting to interview a cybersecurity expert.
Here's the note, unedited, not proofread, and not ready-for-prime-time:
This is the “Disney conundrum.” To get investors excited about potential of shale holdings and to "talk their book" to investors, XOM can post stories about “doubling” production from existing properties with new technology and new completion strategies.
But by doing so, they make surrounding acreage that much more valuable/costly/expensive, which means that if XOM wants to buy neighboring minerals, they will pay a higher premium.
My hunch, XOM knew about “doubling” production with new technology / new completion strategies many years ago, but now that most folks are aware of that, XOM felt safe to start talking about it.
Everything that follows is anecdotal based on following the Bakken for over a decade now.
All older Bakken wells, certainly those with file numbers below 25XXX need to be re-fracked (or re-drilled). The first Bakken wells began with five numbers around 165XX. Older Bakken wells were fracked with old completion strategies.
Some/many/most of those older wells will not be re-fracked or re-drilled. Operators will simply plug and abandon them and start over in the same location with a minimum of four to six wells on a paid ini the same location.
They’re probably able to drill and complete two wells these days for the price of one well at the time of the original Bakken boom (2000 in Montana, 2007 in North Dakota through 2010, or thereabouts).
And at the end of the day, instead of one parent well ini a given location, any given operator will have four to eight wells in that same location (on the same, but much larger pad). In addition, the infrastructure for getting out to the site (a road) and the pad will already be in place. Infrastructure of gathering oil production and getting it into regional pipelines will also already be in place, saving money, time, and minimizing further environmental impact.
So there’s that.
Now, with regard to re-fracking, I’m not aware of much re-fracking per se. Which suggests to me that Mike Papa (EOG) may have been correct, suggesting it will simply be more feasible to simply re-drilling wells rather than re-fracking existing wells.
The impact of fracking new wells on production of neighboring old wells is interesting, exciting and very rewarding for mom-and-pop mineral owners where one or two or four new wells definitely impact their “mailbox money.” However, for big operators, it’s unlikely that this effect, which I refer to as a “halo” effect has much impact for a big operator.
To specifically answer the question: why are we seeing so few re-fracks in the Bakken.
Answer: operators are managing their assets. I'll talk more about this later. We've addressed it before. Operators are generally "E&P" companies, focused on "E" as much as on "P."
OPEC In A World Of Hurt -- June 6, 2023
Locator: 44849B.
If you have time for only one energy story today, this is is.
From the link:
Saudi Arabia over the weekend slashed 10% of the kingdom’s oil output to boost prices, and the returns so far suggest it could be a costly bet.
After warning speculators that OPEC+ could cut oil production again, Saudi Energy Minister Prince Abdulaziz bin Salman announced Sunday that the world’s biggest crude exporter would reduce 1 million barrels of its own output in July after other cartel members refused to join the effort.
The Organization of the Petroleum Exporting Countries and its Russia-led allies account for close to half of the world’s oil production.
An output cut was expected to prop up prices amid concerns about a slowing global economy crimping energy demand. On Monday, oil prices opened sharply higher but gave up most of those gains. Brent crude, the international oil benchmark, rose 0.8% to settle at $76.71 a barrel.
Oil prices remain about 18% lower than they were when OPEC+ first jolted the market in October with output cuts, which some members, including Saudi Arabia and Russia, expanded in April.
Saudi officials familiar with the matter acknowledged that Monday’s increase in oil prices was less than expected by Abdulaziz, who privately defended the move to cut output and push back against short sellers after the contentious meeting, they said.
In other words, Abdulaziz remains an unhappy camper.
The two big stories today:
- OPEC+ is really, really in a world of hurt.
- Apple's headset.
OPEC+:
- Saudi's inability to raise prices. Link here.
- Citi: oil prices unlikely to hit $80 despite Saudi's production cut. Link here.
- Russia: takes huge hit in May, 2023. Link here. So much for all that talk about futility of sanctions. This is from Charles Kennedy so you know it's good and it's important.
***************************
How Bad Is It?
Previously posted:
Locator: 44842SA.
The "y-axis" has been changed from last month's posting making things look better than they really area.
Today's one year view:
The five-year view is better and other time-spans also show how badly Saudi Arabia must be hurting.
Years ago, Saudi's budget was based on $100-oil. From there it went to $80-oil. Currently running about $75 but could be selling oil at greater discounts.
One Well Coming Off Confidential List Today -- June 6, 2023
Locator: 44848B.
The two big stories today:
- OPEC+ is really, really in a world of hurt.
- Apple's headset.
OPEC+: this will get a lot of attention on the blog today if I don't run out of time.
Apple's headset: I have no interest in posting this story. Blogging about the headset will be minimal and will be for the archives only.
*************************
101 Days Of Summer
Day 10.
Beautiful biking weather. On a scale of 1 - 10, a twelve (12).
*************************
Back to the Bakken
Active rigs: 36 or thereabouts.
WTI: $70.66.
Natural gas: $2.184
Peter Zeihan newsletter. E-mail campaign archive. Mark Perry: Carpe Diem.
Wednesday, June 7, 2023: 18 for the month; 128 for the quarter, 383 for the year
39245, conf, CLR, Skachenko FIU 7-31H,
36563, conf, Formentera Operations, LIG2 02-04-162-91E,
36562, conf, Formentera Operations, LIG2 02-04-162-91B,
36561, conf, Formentera Operations, LIG2 02-04-162-91F,
36560, conf, Formentera Operations, LIG2 02-04-162-91G,
33903, conf, Slawson, Mole 2-20H,
33901, conf, Slawson, Mole 1 SLH,
RBN Energy: could the Fiscal Responsibility Act end Mountain Valley Pipeline's troubles?
The recent drama related to the U.S. debt ceiling may have illustrated the chaos that polarization has brought to Washington, but it showed one other thing as well: there’s an appetite for federal permitting reform from Democrats and Republicans alike.
The Fiscal Responsibility Act (FRA), signed into law Saturday by President Biden, addressed some immediate priorities — including changes to the review process under the National Environmental Policy Act (NEPA) — but its mandate to expedite completion of the long-delayed Mountain Valley Pipeline (MVP) caught many of the project’s supporters and critics by surprise. In today’s RBN blog, we look at the permitting issues that have kept MVP in regulatory limbo and how the FRA is designed to overcome them and bring the project back to life.
Concerns about energy infrastructure permitting have pervaded public policy for at least a decade, on both sides of the political aisle. On one side, concern over things like new power transmission for renewable energy sources has been dominant, while on the other side concern over new natural gas pipeline infrastructure like MVP has been center stage.
The whole debate over permitting reached a fever pitch as both Congress and the Biden administration became deeply concerned over reliability and national security in our energy mix following events such as the Winter Storm Uri Texas blackout.
The Williston Basin Never Ceases To Amaze -- June 6, 2023
Locator: 44847B.
From yesterday's daily activity report --
One new permit, permitted for re-completion:
- 11865, 170, White Rock Oil & Gas, Mead-Federal 43-20, a Madison formation well; Grassy Butte oil field; t2/1986; cum 456.
This vertical well was drilled back in 1986. It appears to have never missed a month of producing oil since 1986, except in 2022. Now, the operator is looking into re-completing this well.
Spacing: SE -- one-quarter section -- 160 acres
- homesteader's descendants: 160 acres
- 12% royalty
- average price of oil over the years: $40 / bbl
- 455,795 bbls x $40 x 12% = $2.2 million from one vertical well
The Tyler formation is tracked here but over the years a lot of the links have broken.
Note: a simple vertical well to about 9,000 feet; no fracking. Compare with a typical Bakken well: vertically about the same depth and then turn horizontally and drill the lateral another 9,000 feet, followed by fracking. Will take about one day to drill once everything is in place.
A Quiet Day -- Daily Activity Report -- June 5, 2023
Locator: 44845B.
Active rigs: 36.
WTI: $70.51.
Natural gas: $2.213.
One new permit, permitted for re-completion:
- 11865, White Rock Oil & Gas, Mead-Federal 43-20,
21266, The Parent Well And Four Daughter Wells Soon To Be Reported -- June 5, 2023
Locator: 44846B.
For newbies: tying together a story of just a single drilling site.
The Oasis Dahl Federal wells south of Williston. A single well drilled in 2012 kept this lease by production. Finally ten years later, four more wells on this pad. The story is not yet over. Production data yet to be reported.
The data points:
The original (or "parent") well in this 1280-acre unit, sections 2/11-153-101 was #21266. The original operator was SM Energy. The current operator is Oasis, now part of Chord Energy (Oasis + Whiting).
The scout ticket and the production history.
First, the scout ticket:
Now, the full production history for this well:
 |
NDIC File No: 21266 API No: 33-053-03703-00-00 CTB No: 121266 Well Type: OG Well Status: IA Status Date: 3/17/2023 Wellbore type: Horizontal Location: SWSE 11-153-101 Footages: 22 FSL 2488 FEL Latitude: 48.082328 Longitude: -103.635729 Current Operator: OASIS PETROLEUM NORTH AMERICA LLC Current Well Name: DAHL FEDERAL 15-11H Elevation(s): 2127 KB 2110 GR 2112 GL Total Depth: 20850 Field: BAKER Spud Date(s): 10/15/2011 Casing String(s): 9.625" 2113' 7" 10952' Completion Data Pool: BAKKEN Perfs: 10952-20850 Comp: 1/11/2012 Status: AL Date: 4/16/2015 Spacing: 2SEC Cumulative Production Data Pool: BAKKEN Cum Oil: 160516 Cum MCF Gas: 200073 Cum Water: 70974 Production Test Data IP Test Date: 1/14/2012 Pool: BAKKEN IP Oil: 494 IP MCF: 418 IP Water: 554 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Monthly Production Data
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So, that was the original well in that drilling unit, sited in section 11, with the lateral running north into section two. This well was 1280-acre spacing; sections 2 and 11 - 153-101.
Since
then, Oasis has drilled four more wells on that pad. These are the
permits for these four new wells. Note that all four have the same
spacing unit as #21626 above, names section 2/11-153-101:
- 38270,
- 38271,
- 38272,
- 38273,
This is the permit for the original, or "parent" well, #21266. Note: same drilling unit, 1280-acre spacing, sections 2/11-151-101 as the four new wells above. Note: SM Energy was the original operator before being acquired by Oasis (now Chord):
The wells are sited on a large pad in section 11; the horizontals will run north into section 2:
How the five wells / the five pumpers will be lined up / positioned on the single large pad:
The maps:
From
today's NDIC daily activity report, three of the four new wells are
noted to be "plugged or producing." This means the wells are still on
the "confidential list" but the operator has reported that the wells
have been drilled to depth, and were either productive or "dry." In the
Bakken, 99% of all wells "plugged or producing" turn out to be
successful wells. We don't know yet but it's likely these wells are
successfully drilled to depth and waiting to be fracked:
Bottom line:
- the parent well, #21266, Dahl Federal 15-11H, now has four daughter wells, #38770 - 38773, inclusive.
- one suspects the four daughter wells will be much better wells than the parent well;
- it's
hard to say how long it will be before these wells are fracked /
completed, but generally pareent wells are off line less than six months
while neighboring wells are fracked; the parent well in this case has
been off line for about that length of time now.
Space-holder.