Oil Demand Has Peaked; Long Live Oil! January 16, 2024

Locator: 46566CHINA.

Link here.

Seven DUCs Reported As Completed -- Januuary 16, 2024

Locator: 46565B.

WTI: $71.91.

Active rigs: 40.

One permit approved, #40453:

• Operator: Koda Resources
• Field: Fertile Valley (Divide County)
• Comments:
• Koda Resources has a permit for an Amber well, SEE 13-160-103, 
• to be sited 410 FSL and 811 FEL.

Seven producing wells (DUCs) reported as completed:

• 35585, n/d, XTO, Halverson 13X-33EXF,
• a well of interest, #16055, off line since 5/23;
  
• 39408, 2,005, MRO, Clifford 24-8TFH, Killdeer,
  
• 39409, 2,909, MRO, Gorder 34-8H, Killdeer,
  
• 39649, 4,059, Grayson Mill, Fleck 150-100-1-12-8H,
• 39650, 2,872, Grayson Mill, Fleck 150-99-6-7-5H,
• 39651, 2,064, Grayson Mill, Eide 150-99-6-7-5H,
• 39716, 402, Petro-Hunt, Joel Goodsen 149-102-32C-29-1H,

The "new" MRO wells in Killdeer field:

Well of interest: #16055, inactive right now, near #35585 --

• 16055, 461, XTO, Sveen 14X-34, Capa, t9/06; cum 305K 5/23;

The Grayson Mill Eide wells:

• 26252, 734, Grayson Mill, Eide 150-99-7-6-2H, Tobacco Garden, t1/14 cum 283K 11/23;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	30	23702	23715	66853	37841	33722	4007
BAKKEN	10-2023	16	14612	14535	76596	23073	20762	2311
BAKKEN	9-2023	0	0	0	0	0	0	0
BAKKEN	8-2023	1	0	0	45	0	0	0
BAKKEN	7-2023	0	0	0	0	0	0	0
BAKKEN	6-2023	0	0	0	0	0	0	0
BAKKEN	5-2023	11	339	447	72	789	637	54
BAKKEN	4-2023	30	1016	1042	532	2232	1940	22
BAKKEN	3-2023	30	955	866	478	2646	1406	986
BAKKEN	2-2023	26	1009	996	516	2754	2543	22
BAKKEN	1-2023	30	654	632	292	2105	1857	0

Other neighboring Eide wells:

• 26521: no halo effect
• 26248: remains inactive since 5/23;

An Old Grayson Mill Well Has Nice Jump In Production -- January 16, 2024

Locator: 46565B.

You wanna bet we'll see another jump in production some day?

This DUC has been completed, reporting today:

• 39651, 2,064, Grayson Mill, Eide 150-99-6-7-5H, Tobacco Garden,
  

The neighboring, older well:

• 26252, 734, Grayson Mill, Eide 150-99-7-6-2H, Tobacco Garden, t1/14 cum 283K 11/23;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2023	30	23702	23715	66853	37841	33722	4007
BAKKEN	10-2023	16	14612	14535	76596	23073	20762	2311
BAKKEN	9-2023	0	0	0	0	0	0	0
BAKKEN	8-2023	1	0	0	45	0	0	0
BAKKEN	7-2023	0	0	0	0	0	0	0
BAKKEN	6-2023	0	0	0	0	0	0	0
BAKKEN	5-2023	11	339	447	72	789	637	54
BAKKEN	4-2023	30	1016	1042	532	2232	1940	22
BAKKEN	3-2023	30	955	866	478	2646	1406	986
BAKKEN	2-2023	26	1009	996	516	2754	2543	22
BAKKEN	1-2023	30	654	632	292	2105	1857	0

Other neighboring Eide wells:

• 26521: no halo effect
• 26248: remains inactive since 5/23;

Germany Loses Manufacturing Crown -- January 16, 2024

Locator: 46564GERMANY.

Link here.

Germany and GDP, link here: 

AMD, NVDA Surge -- On A Down Day For The Market In General -- January 16, 2024

Locator: 46563TECH.

Terabytes of data. 

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.

Why? Link here.

More. Link here. 

But it wasn't just AMD.

AMD and Nvidia surged today in another down day for the market in general.

See terabyte events, featuring Taylor Swift. 

The headline is completely inappropriate on so many levels.

From the linked article:

Here was a marquee Wild-Card weekend playoff contest, walled off from the nonpaying public, all because the NFL sold the game to a mega media conglomerate, NBCUniversal, which wanted to use it to attract new subscribers for Peacock, its paid streaming service featuring French bike racing and 19 zillion reruns of “Law & Order.”

Far be it from me to reject capitalism in the Journal, but historically this hasn’t been the way of the NFL, where TV socialism reigns, and it’s supposed to be for each according to his abilities, to each according to his needs—especially the compulsive gamblers. (The Chiefs-Dolphins joust was available over the air, free, in the Kansas City and Miami area, per NFL rules.)

The streamer announced Sunday that 23 million people watched the game, a figure Peacock said includes those local audiences in K.C. and Miami. Peacock also claimed the game drove internet usage to “a single day U.S. record,” a major claim, if it includes the afternoon two llamas escaped in Arizona and BuzzFeed asked everyone: What color is this dress?

This is our new reality. You’re already paying Amazon if you’ve been watching Thursday Night Football; Sunday Ticket is off to YouTube; and, as cable continues to bleed subscribers, more streaming games are sure to follow.

The NFL’s desire for every eyeball is pushing up against the new realities of modern media, and if it wants the dollars (Peacock paid $110 million for its playoff game, the Journal’s Joe Flint reported) it has to let its TV partners reorient their business.

The writer of this article is also behind a paywall.

(Allow me to disclose the obvious: I’m behind a paywall! I’m fine with it. If this doesn’t work out, I’ll be standing at an intersection with my column scribbled on a sandwich board.)

Me? The only thing I see in articles like these about the Chiefs and Taylor Swift: a gazillion blades being sold, like Nvidia and AMD.

From IBD today:

From whispers January 5, 2024, link here:

Tickers (and again, this was on a day the market in general fell about 1%):

One year ago, we all had the same information, if we read the 10-Ks:

Legacy Fund Deposits -- December, 2023

Locator: 46562LEGACYFUND.

Link here.

North Dakota Oil Production Update -- Winter Storm Gerri -- Production Cut More Than Half? January 16, 2024

Locator: 46561B.

Link here. 

Apple -- January 16, 2024

Locator: 46560APPLE.

Links here:

Apple: largest smartphone maker by volume.

• great article: right now, Apple's biggest problem -- Tim Cook has not been clear about its AI strategy

Apple: another product killer.

• this is what the first link / story missed.

From the linked article:

Analyst Dan Dolev downgraded shares of PayPal to Neutral from Buy, lowering his target for the stock price to $65 from $72.

Dolev wrote in a research note Tuesday that he sees PayPal continuously losing market share to Apple Pay as a worry.

Worry among investors that Apple Pay is gaining market share over PayPal is nothing new.

Concern about competition is a major factor behind PayPal stock’s 81% slide from its July 23, 2021 record closing high of $308.53 to $58.65 on Tuesday.

General economic pressiures, plus narrower margins as growth in the company’s so-called branded checkout business has slowed, have hurt the shares as well.

Apple Pay is absolutely seamless. I almost never forget my iPhone when going out for the day, but I have forgotten my billfold. No problem. My iPhone has "everything" my wallet has. 

Texas does not yet participate in state ID / driver's license being placed in the Apple iPhone, but it's just a matter of time. In the meantime, I have a photograph of my driver's license which should "buy" me some time, if I need it. Knock on wood. 

ERCOT Vs ISONE -- Early Morning, January 16, 2024

Locator: 46559ISO.

We've talked about this before:

• ISONE: has a supply problem. Self-inflicted.
  
• ERCOT: has a demand problem. A good thing. A very good thing.
  

ISONE.

• earlier this morning, January 16, 2024, winter storm Gerri.

ISONE, in MW:

• Supply/demand:
• Demand : 18,000 
• Capacity: 23,000

• Cost: $300 / MW
  

• Mix:
• Nat gas: 49%
  
• Net imports: 21% -- buying electricity from other ISOs
  
• Nuclear: 12%
• Hydro: 8% -- from Canada
  
• Oil: 6% -- oil contributing more than "renewables"
  
• Renewables: 4%

• Renewables:
• Refuse: 43%
• Wow ood: 30%
• Wind: 22%
• Landfill gas: 4%
• Solar 2%

• Wind:
• 22% of 4% is …. 0.0088 or 0.88%.
• 0.0088 x 18,000 = 158.

******************
Compare With Texas

• Supply/Demand
• Demand: 75,000 
• Capacity: 85,000
• in round numbers, 4X that of ISONE
  

• Wind and solar both off the chart (as in high supply).

• Mix:
• Nat gas: 49%
• Solar: 19%
• Wind: 9% -- will increase significantly as day wears on
  
• Coal: 16%
• No oil.
• No imports -- Texas is an independent ISO.
  

Done For The Day -- This Makes My Day -- See You Later This Afternoon -- January 16, 2024

Locator: 46558APPLE.

Link here.

I was wondering when the US Supreme Court would come to its senses on this issue. If SCOTUS took up this issue, there would be no end to patent suits, anti-trust suits, suits on suits. As it is, it's been too much already.

Nine Spanish Words And A Musical Interlude -- January 16, 2024

Locator: 46557DUOLINGO.

Seven Spanish angels.

Now, nine Spanish words.  In Duolingo, we've already come across several of these ... five to be exact, five of eight ... my personal favorite, la alfombra. 

Link here. 

For Medicare-Eligible: Huge News -- Thank You Mr Biden -- January 16, 2024

Locator: 46556BIGPHARM.

Disclaimer: I'm doing some of this from memory so some of my numbers / data points could be wrong. If this is important for you, go to the source.

This never would have happened under Bush I, Bush II, or Trump. How can I say that? Because it didn't.

I have no idea when this all happened; maybe someone else deserves the credit. I don't know. But it is taking effect under the Biden administration.

The graphic below doesn't even begin to tell the whole story.

Bottom line:

Those with Part D Medicare insurance will have out-of-pocket pharmacy costs capped at $2,000 next year, and $3,500 this year, compare to "no cap" previously. With "no cap" folks could literally see their life savings wiped out in one year; now? Not gonna happen. 

And not only is there a $3,300 cap this year (and $2,000 cap next year), if you get hit with a $3,300 / $2,000 "co-pay" now, one can spread it out across the entire year.

The lede of the linked article:

For the first time, there is a ceiling on how much they will pay in 2024 for their Part D drugs.

Changes brought about by the 2022 Inflation Reduction Act mean that people on Part D plans now pay no more than roughly $3,300 on drugs annually—a number that could shift a bit based on whether they take brand or generic medications. In 2025, that cap will change again to a flat $2,000.

“It will let me take a deep breath,” said Judy Aiken, a 69-year-old retired nurse in Portland, Maine, who last year paid more than $9,000 out of pocket for a drug to treat her psoriatic arthritis, Amgen ’s Enbrel. “Frankly, I was delighted.”

Here’s how it works:

People who buy drugs through Medicare Part D, the government-funded insurance program that covers most prescription drugs, pay thousands of dollars for their drugs until they reach the so-called catastrophic zone of spending.

After that, they had to continue paying 5% of their drugs’ cost for the rest of the year, sometimes adding up to thousands more. This year, that 5% coinsurance was eliminated.

Once Medicare patients spend roughly $3,300—the “catastrophic zone” threshold for 2024—they won’t have to pay any more out of pocket for Part D drugs.

For example, consider a hypothetical 69-year-old man who had a plan with a $505 deductible. If he visited the pharmacy last year to fill his first prescription for a $200,000-per-year blood-cancer drug, costing roughly $16,600 a month, he paid his full deductible, plus 25% coinsurance until he hit the $3,100 catastrophic threshold for 2023, plus 5% coinsurance after that—in total around $3,800. On his next refill, since he remained in the catastrophic zone, he paid the 5% coinsurance, roughly $830. He continued paying roughly $830 every time he filled his prescription, in total spending more than $12,000 out of pocket for the year.

Thank you, Mr Biden.

*******************************
But It Doesn't Come Cheap For Some

Link here.

Your Medicare premium for a given year is based on your income from two years prior—typically from the last tax return on file. Since you know that in advance, there could well be opportunities to head off some income-based surcharges down the line.

A little hyperbole?

For the ultra-rich, missing the "gap" by 5 cents will mean your monthly premium will go from $559 / month to $594 / month. Hardly "sunk."

And, if you're earning that kind of money, certainly you can find another "loss" of five cents from somewhere.

But, as usual, the super-rich get off easy; look at that first jump, at $129K -- hardly rich. Any more.

Covid: Thoughts On Conflicting Data -- January 16, 2024

Locator: 46555COVID.

There's only two sets of data to look at:

• the CDC clinical data; and,
• the CDC (?) sewer / waste / human poop data.
  

What "big Covid wave"? It seems like there are a lot of things we could track in sewage ... starting with illicit and licit drugs.

The CDC (?) sewer / waste / human poop data is not new. The sewage story has been reported for quite some and continues to be reported: 

• sewage samples suggest a lot of Covid virus particles out there;
• The CDC data suggests we've seen the peak of symptomatic disease for this year.

In the five previous seasons, there have been three seasons in which we saw a single peak; in one season (2018 - 2019) we saw a double peak; in one season (2019 - 2020) we saw a triple peak with the respiratory illness season lasting much longer than the norm -- out to sixteen weeks into the new year.

All things being equal, the sewage studies suggest we may see a double peak, or even a triple peak season this year (January through end of March).

But all things are not equal. What has changed:

• Americans much more knowledgeable and continue to take personal precautions; enough, perhaps, to interrupt the transmission of the virus;
• we now have vaccines for all three major respiratory viruses: RSV, "seasonal flu," and, Covid;
• we now have more effective treatment modalities to treat all these viruses once infected;
• decades of observation suggest that human viral pathogens attenuate over time.

Of those four "data points," the one that interests me the most? The likely attenuation of the Covid virus.

So, can the information from the two data sets be reconciled?

Let's assume the data is completely accurate.

My take: Covid is no longer a concern for those between the ages of 26 and 64 with normal immune systems. 

The data point I'm missing: Covid effect on immunocompromised individuals living in urban areas who have not been vaccinated.

And So It Begins -- January 16, 2024

Locator: 46554B.

Dismal day for blogging -- it's either the cold spell or the news -- but we'll press on, though at the moment my heart's not in it. Off the net for an hour ... back about 9:30 a.m. CT.

On the agenda today:

• the triple respiratory threat update; a reader's comment (at that same link); and, a link to a NYT article that appeared right after I posted my update --
• ERCOT: concerns were overblown; perhaps slightly tighter when the sun goes down later this afternoon/early evening; but we'll pray to the wind gods and sun gods and ...
  
• more on the NFL wildcat round; the Cowboys again (of course); the Peacock paywall (spoiler alert: it's only going to get worse); and the Eagles incredible demise;
• terabytes of data;
  
• Apple Watch: will "pause" O2 monitoring 
• SCOTUS sides with Apple on separate issue
  
• Medicare: thank you Mr Biden (this is, perhaps the biggest story of the day)
• the jobs / businesses that "saved" America from a hard landing / recession (at least so far);
• eight Spanish words with Arabic roots
• Iowa: over-rated in importance? Yup, won't say any more on this.
• AMD and Nvidia (again) surged today (posted later in the day)
  

These are the four stories that interest me most this morning, two from the list above:

• Medicare update;
• Covid data;
• Texas economy and politics.
• terabytes of data.
  

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

WTI: $72.67. This still blows me away. It certainly suggests traders expect:

• a recession / hard landing;
• a strong dollar;
• huge supply / demand short term;
• not much risk in Mideast, despite the headlines

Tuesday, January 16, 2024: 28 for the month; 28 for the quarter, 28 for the year
39887, conf, Kraken Deacon 19-18-7 2H,
38160, conf, BR, Lone Beaver 7-1-17TFH,
37344, conf, Whiting, Bigfoot 23-11 6TFH,
35366, conf, Enerplus, Koala 152-994-23CH,

Monday, January 15, 2024: 24 for the month; 24 for the quarter, 24 for the year
39888, conf, Kraken, Deacon 19-18-7-3H,
39054, conf, Oasis, Bergem 5199 43-33 7B,
39053, conf, Oasis, Bergem 5199 43-33 6T,
38159, conf, BR, Lone Beaver 7-1-17TFH,
35365, conf, Enerplus, Boomer 152-94-23CH-TF1,
35364, conf, Enerplus, Joey 152-94-23CH,

Sunday, January 14, 2024: 18 for the month; 18 for the quarter, 18 for the year
39886, conf, Kraken, Deacon LW 19-18-7-12TFH,
38217, conf, BR, Lone Beaver 8-1-17TFH,
36377, conf, Hess, EN-Enger-156-94-1423H-2,

Saturday, January 13, 2024: 15 for the month; 15 for the quarter, 15 for the year
39885, conf, Kraken, Kisner 24-13-12 4H,
36378, conf, Hess, EN-Enger-156-94-1423H-3,

RBN Energy: after a long courtship, gas-focused Cheasapeake and Southwestern put ring on it.

In a deal the energy industry had been whispering about for months, Chesapeake Energy and Southwestern Energy will combine to form what will be the largest natural gas producer in the U.S., with 7.3 Bcf/d of production in the Marcellus/Utica and the Haynesville and ready access to the Northeast and the LNG export market — assuming the merger passes muster with federal regulators. In today’s RBN blog, we discuss the merger and why it makes sense for both E&Ps. 

The surging upstream M&A market, which accelerated to an all-time record pace over the past six months, has stunned a lot of industry observers. The more than $200 billion in transactions over the past year and two weeks has included some surprising deals (Chevron acquiring Hess) and some competitive bidding wars (Occidental Petroleum winning CrownRock). But the latest deal — the longest-rumored and perhaps the most logical of all (think peanut butter and jelly) — is the merger of Chesapeake and Southwestern, the two largest Haynesville producers and major Appalachia operators. In today’s blog, we analyze this $11.5 billion marriage.