Week 28: July 10, 2023 -- July 16, 2023

Locator: 45141TOP.

Top story:

• the stock market setting new records; NASDAQ at new record
  
• soft landing; no recession; one more 25-bp hike?
  

Top international non-energy story:

• Russian-Ukraine war continues but it seems "no one" knows.
  
• Prigozhin -- not seen in several days;
• Ukraine advances on Bakhmut
  
• NATO to admit Sweden; Turkey gets F-16 package from US in exchange;
  

Top international energy story:

• 
  

Top national non-energy story:

• 
  

Top national energy story: 

• US LNG production hitting new records
  
• WTI breaks $80 but pulls back; closes at $75 at end of week
• shares in majors slump
  
• record heat, nationally
  
• Texas grid holds: easily.
  

Focus on fracking: most recent edition.

Top North Dakota non-energy story:

• #1 among US states: GDP growth 1Q23, 12.1%
  

Top North Dakota energy story:

• MRO's Daniel well, a Three Forks second bench well.
  

Geoff Simon's top North Dakota energy stories:

•  Quick connects.
  

Bakken economy: North Dakota's 1Q23 GDP growth: #1 in the nation.

Commentary:

Entertainment: Mission Impossible, Barbie (pending); Oppenheimer (pending).

Global NGL Production -- US Sets Another Record -- July 14, 2023

Locator: 45140NGL.

Link here.

Hart Energy:

Top ten NGL producers, billion cubic meters, exporting rank:

• USA: 934; #1 (and way, way below its potential; think Mountain Valley)
  
• Russia: 702; #1
  
• Iran: 257
• China: 209 (unlikely to be a net NGL exporter)
  
• Qatar: 177; 3rd
  
• Canada: 172; "a top exporter."
  
• Australia: 147; #1
  
• Saudi Arabia: 117; does not export its natural gas;
  
• Norway: 114; 3rd
  
• Algeria: 101; 5th

So, the top five producers:

• US
• Russia
• Qatar
• Norway
• Algeria 
  

Top exporters:

• Australia
• Norway
• Qatar
• US / Canada
  
• Algeria

Soft Landing? July 14, 2023

Locator: 45139ECON.

I'll believe it when I see it but if this occurs, this is simply amazing -- a very soft landing, no recession, and, in the big scheme of things, the Fed able to hold higher interest rates that were manageable for most. I guess.

ERCOT -- Texas Grid Update -- July 14, 2023

Locator: 45138TX.

Link here.

ERCOT reminded folks to conserve electricity today. But there were no problems. Demand easily met.

It looks like TX peaked at about 4:00 p.m.:

• demand: 80,944
• committed capacity: 92,129
• reserves: 11,185 -- which is about the total ISO NE amount on light-to-average days;
• I find it incredible that one state can manage this amount of electricity coming from multiple sources.

CLR Quale Wells

Locator: 45137B.

Updates

February 4, 2024: three Quale wells coming off confidential list this week.

The Wells 

The Quale wells:

• 19232, 1,423, CLR, Quale 1-1H, t2/12; cum 605K 10/23; off line;
  

From this post, 17 wells on a 640-acre spacing unit:

• 28930, 1,132, CLR, Quale Federal 2-1H, Sanish pool; 30 stages, 3.5 million lbs; t2/15; cum 437K 12/19; some flaring; this well was sited on a Mack pad but the horizontal ran in the neighboring drilling unit; of all the wells in this list, this Quale well is the only long lateral; all the rest are short laterals; cum 509K 5/23; cum 525K 11/23; was off line for six weeks;
  

• 39315, conf, CLR, Quale Federal 3-1H2,

• 40041, conf, CLR, Quale Federal 4-1H,
• 40042, conf, CLR, Quale Federal 5-1H2,
• 40043, conf, CLR, Quale Federal 6-1H,
• 40044, conf, CLR, Quale Federal 7-1H1,

• 40041, loc, CLR, Quale Federal 4-1H, Antelope,
• 40042, loc, CLR, Quale Federal 5-1H2, Antelope,
• 40043, loc, CLR, Quale Federal 6-1H, Antelope,
• 40044, loc, CLR, Quale Federal 7-1H1, Antelope,
• 40045 loc, CLR, Quale Federal 8-1H2, Antelope,

The maps:

• 
  
  
  
  
  

Director's Cut, May, 2023, Data And Daily Activity Report -- July 14, 2023

Locator: 45137B.

Director's Cut, May data, released. 

Director's Cuts are tracked here. 

Disclaimer applies. 

DUCs and wells off-line for operational reasons tracked here.

Producing wells:

• new all-time high, this month, May, 2023: 17,913 producing wells.
• also, see story in Minot Daily News.
• the North Dakota Department of Mineral Resources reported the state had 17,913 (preliminary number) producing wells in May.
• the previous all-time high was 17,791 producing wells in October 2022. 
• of that total number, 15,622 or 87% are unconventional Bakken/Three Forks wells and 2,291 or 13% are produced from legacy conventional pools.

Highlights.

• active rigs
• 36: due to workforce; mergers, acquisitions
• expected to the mid-forties with gradual increase over next two years;

• crude oil production:
• May, 2023: 1,133,530 bpod
• April, 2023: 1,135,763 bopd

• crude price:
• today: $71.25
• May, 2023; $65.82
• April, 2023: 75.23

• natural gas: 
• May, 2023: 3,156,374, MCF/day
• April, 2023: 3,119,451 MCF/day

• wells permitted:
• June: 85
• May: 63
• April: 89

• DUCs:
• May: 459
• April: 458

• inactive:
• May: 1,779
• April, 1,899

• completed:
• June: 85 (preliminary)
• May: 138 (preliminary)
• April: 51 (preliminary)

• producing:
• May, 2023: 17,913 (new all-time high) 
• April: 17,768

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Daily Report

Active rigs: 37

WTI: $75.42. Down almost 2% on the day; down $1.47 on the day.

• Murban crude: $80.68.

Five new permits, #40041 - #40045, inclusive:

• Operator: CLR
• Field: Antelope (McKenzie)
• Comments:
• CLR has permits for five Quale Federal wells in SENW 1-152-94; 
• to be sited between 2049 FNL and 2181 FNL and between 2188 FWL and 2310 FWL

Permitted for pilot projects:

• 40040, Resonance Exploration; Bottineau, water injection
• 40046, Resonance Exploration; Bottineau, water injection

Four permits renewed:
BR

Two producing wells (DUCs) reported as completed:

• 39075, 133, Crescent Point Energy, CPEUSC Szarka 3-36-25-159N-100W-MBH
• 36424, no IP, XTO, Linda 41X-22C, Williams County

Murban Crude

Locator: 45136OIL.

Updates

April 14, 2022: in a rare deal, Glencore sold one million bbls of Murban crude to US refiner MPC as more U.S. refiners seek replacements for Russian oil.

The deal also comes as the economics of moving Middle East crude to the United States, the world's No. 2 crude importer, have become attractive, they said.

Background 

A benchmark for the Middle East? Link here.

See blog: link here.

Wikipedia:

• Abu Dhabi
• ADNOC
• light, sour
• field discovered in 1953
• total proven reserves: 10 billion bbls
• 250,000 bopd

Federal Money Keeps Flowing -- The "Subsidy War" -- Europe Vs US -- MAGA -- July 14, 2023

Locator: 45135ECON.

Link here.

Add this to the debt ceiling bill, the "CHIPS" bill, and the IRA, President Biden is having quite a run.

From the linked article:

$20 billion will be up for grabs to facilitate clean energy projects that will “massively expand investment in new projects that reduce pollution across the country,” the White House said in a statement released on Friday, July 14, 2023.

The $20 billion in funds is part of the EPA’s Greenhouse Gas Reduction Fund.

The $20 billion will be awarded via two competitions. The first is a $14 billion National Clean Investment Fund (NCIF) competition that will provide grants to up to three national clean financing institutions to offer financing for “tens of thousands of clean technology projects nationwide”—40% of which will be in low-income and disadvantaged communities. 

The second fund, a $6 billion Clean Communities Investment Accelerator (CCIA), aims to work with the NCIF by issuing grants to up to seven nonprofit organizations that will give funds to community lenders financing clean technology projects—including retrofitting homes to make them more efficient and converting small business delivery fleets to EVs.

The move is also part of what some are referring to as a subsidy war, which appears to be pitting European countries against the United States, which is looking increasingly attractive to companies looking to invest thanks to the generous subsidies that are planned to be splashed around.

The 2024 presidential campaign is tracked here.

North Dakota: Massive Tax Cut -- US: Greatest County In The World -- July 14, 2023

Locator: 45134ND.

Great! But still not as good as Texas' and Texas is now even better! 

Regardless: the "argument" -- which state is best when it comes to property taxes and state income taxes is almost irrelevant (with perhaps some exceptions. Americans across the board have it really, really good). 

It's fun to compare different states but in the big scheme of things, the differencs are minimal -- as I discuss elsewhere -- but "we" still make the comparisons.

Link here.

Overview, North Dakota:

• Income tax will be eliminated for single filers making less than $44,725 and married couples making less than $74,750.
• A 1.95% tax will be applied to income between $44,725 and $225,975 for single filers and between $74,750 and $275,100 for married couples.
• A 2.5% tax will be applied to any income earned beyond the second bracket’s thresholds.

Currently, North Dakota’s highest income tax rate is 2.9%.

The remaining $157 million in tax relief will go toward property tax credits for homeowners.

Starting in 2024, all homeowners will be able to claim a $500 property tax credit on their primary residence.

The bill also will expand eligibility for the Homestead Property Tax Credit, which applies to homeowners 65 and older, as well as disabled homeowners. Under the new parameters, qualifying homeowners with annual incomes under $40,000 will be able to apply for a credit worth up to $9,000, while those making $40,000-$70,000 will be eligible for a credit worth up to $4,500.

EIA, Beta Site -- Total Energy Production And Consumption By State

Locator: 45133USENERGY.

Link here.

Rolling Hills Estates, Palos Verdes, Southern California -- July 14, 2023

Locator: 45132CA.

Link here.

This Tends To Be A Recurrent Theme, Lately -- July 14, 2023

Locator: 45131ECON.

WTI: continues to fall. Down 1.7%; down $1.30; trading at $75.59.

• I've always said Libya was irrelevant; oil falling after Libya shuts down its largest field tends to corroborate that thesis.

Now, back to the US economy:

Link here.

EVs -- Margins Are Falling -- As Predicted -- July 14, 2023

Locator: 45130EVS.

Link here.

**************************
The Book Club

Carthage Must Be Destroyed: The Rise and Fall of an Ancient Civilization, Richard Miles, c. 2010. 939.73MIL.

Notes.

Texas Property Tax Cut -- Done! That Was Easy -- July 14, 2023

Locator: 45129TX.

Link here.

This is really, really cool.

I've long said that the "property tax issue" in Texas is more than offset by no state income tax.

I have posted a very, very, very long argument elsewhere but the issue is either now moot, or the argument simply needs to be updated.

From the linked article:

A landmark $18 billion tax cut for property owners in the state is headed to Gov. Greg Abbott’s desk late Thursday, ending a monthslong stalemate among the state’s top Republicans with a deal that drew near-unanimous support from legislators.

Both chambers adjourned sine die Thursday evening, ending the second special session Abbott had called this summer to hammer out an agreement on property tax relief.

“We knew … the most contentious issue that we faced was how to return these dollars to the taxpayers,” House Speaker Dade Phelan told House members after they approved the bills Thursday evening. “Congratulations to you, but more importantly, congratulations to the taxpayers of Texas. They are the big winners.”

During floor debate Thursday, Democrats attempted to insert benefits for renters, teacher pay raises and more money for public education into the tax-cuts package in a series of floor amendments but were unsuccessful.

A cheer went up on the chamber floors upon the passage of the three bills that make up the package: Senate Bill 2, which details the proposed property tax cuts; Senate Bill 3, a franchise tax relief bill; and House Joint Resolution 2, a constitutional amendment required to authorize the tax cuts.

“We now have a record-setting plan that will affect every family, every individual, every business, every operation in this state pretty much, for the next several decades,” said Houston Republican Sen. Paul Bettencourt, an architect of the package. “Every Texan deserves it because it’s their money.”

The package puts $12.6 billion of the state’s historic budget surplus toward making cuts to school taxes for all property owners, dropping property taxes an average of more than 40% for some 5.7 million Texas homeowners, and offering brand-new tax savings for smaller businesses and other commercial and non-homesteaded properties. The voters would need to approve the package in November for the cuts to take effect this year.

The immediate winners: those who own apartment rentals. 

No Recession Here -- July 14, 2023

Locator: 45128ECON.

Link here.

US Crude Oil Production: Monthly Production In April, 2023, Set Monthly Record For April

Locator: 45127OIL.

Link here.

I've not seen anyone comment on this, yet.

"US field production of crude oil." Monthly.

This is difficult for me to articulate so I will have to "walk through it" month-by-month, year-by-year.

The EIA reports US crude oil production on a monthly basis.

Prior to the pandemic, in 2019, monthly production was showing record production and climbing month after month.

In 2020, production in

• January exceeded production in January 2019 (one year earlier)
• February exceeded production in February 2019 (one year earlier)
• March exceeded production in February 2019 (one year earlier)

Then, in 2020, production, starting in April, started to drop below production in same months one year earlier. President Trump panicked and shut down the US:

• the worst decline, y/y:
• November, 2019: 13,000
• November, 2020: 11,196

That theme continued through all of 2021: there was not one month in 2021 in which production exceeded production in same month in 2019, two years earlier, before the pandemic.

That theme also continued through all of 2022: there was not one month in 2022 in which production exceeded production in same month in 2019, three years earlier, before the pandemic.

But then, in 2023, this year -- whooo-hooo -- for the first time in four years, the monthly production in April, 2023, exceeded the production in April, 2019:

• April, 2023: 12,615
• April, 2019: 12,149

All-time monthly production record, in a 30-day month:

• November, 2019: 13,000.

Four Wells Coming Off Confidential List Today -- July 14, 2023

Locator: 45126B.

Health: FDA approves OTC birth control pill. Some argue those under the age of 25 and/or with a literacy challenge will have trouble understanding dosing instructions.

• dosing instructions: one tablet -- that would be a pill -- every day at the same time every day.

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

WTI: $76.80.

Monday, July 17, 2023: 74 for the month; 182 for the quarter, 437 for the year
39392, conf, Crescent Point Energy, CPEUSC Ruby 3-20-17-158N-100W-MBH,

Sunday, July 16, 2023: 73 for the month; 181 for the quarter, 436 for the year
39351, conf, CLR, Clyde Hauge 2-13H,
37921, conf, BR, Parrish 2B TFH,

Saturday, July 15, 2023: 71 for the month; 179 for the quarter, 434 for the year
39393, conf, Crescent Point Energy, CPEUSC Matilda 3-29-17-158N-100W-MBH,
39352, conf, CLR, Clyde Hauge 3-13H,
38684, conf, Hess, GO-Ron Viall-156-98-2513H-3,
37922, conf, BR, Boxstone 1A TFH-ULW,

Friday, July 14, 2023: 67 for the month; 175 for the quarter, 430 for the year
39394, conf, Crescent Point Energy, CPEUSC Ruby 2-20-17-158N-100W-MBH,
38853, conf, Whiting, Littlefield 11-21H,
37923, conf, BR, Boxer 1B MBH-ULW,
37841, conf, Lime Rock, State B 3-25-36H-143-97,

RBN Energy: an epic battle brews over the Mountain Valley Pipeline project.

Even an “Act of Congress” may not be enough to keep the Mountain Valley Pipeline out of trouble. The long-stalled natural gas takeaway project in Appalachia briefly appeared to be unfettered from regulatory and legal shackles after Congress rolled an MVP mandate into the debt-ceiling bill — the Fiscal Responsibility Act (FRA) of 2023.

With the MVP provision, Congress effectively approved all required permits for the greenfield project without judicial review in a bid to fast-track the completion and initial startup of the pipeline. The FRA, which President Biden signed into law on June 3, appeared to instantly clear MVP’s path. But that reprieve didn’t last long. Earlier this week, the U.S. Fourth Circuit Court of Appeals once again halted construction of the project, seemingly in defiance of the FRA, setting the stage for a fight at the Supreme Court. In today’s RBN blog, we break down the latest developments and how they impact MVP’s prospects.

Citi, JPM, Wells Fargo, BLK, UNH — All Beat — July 14, 2023

Locator: 45125INV.

UNH up $12 in pre-market trading.

Banks report huge beats.

JPM: link here. Rescued First Republic and profit jumps 67% -- way beyond even most exuberant forecast.

Apple iPhones, link here.

 Reminder: earning season begins. There will be a lot of blogs on the stock market and a lot of "INV" tags, but a reminder: this is not an investment site and I never make recommendations.

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. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source. 

Personal investing: today concludes the second week of the month and I will finish my investing for the first half of the month. Today's choices: from the "big cap, dividend-paying" bucket (40%), I'm buying equal amounts of three big cap stocks.

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