Second Bakken Pipeline Ordered To Shut Down -- WorldOil -- July 21, 2020

Updates

September 21, 2021: update. 

July 25, 2020: something tells me there is more to this story than meets the eye.

Original Post

 

Link here. Remember the DAPL? There's another one:

On July 2, a lesser-known conduit  called Tesoro High Plains was ordered shut for the first time in its 67 years of operation. Together, the two pipelines ship more than one-third of crude from America’s prolific Bakken shale formation to market. Their travails signal the ebbing of the oil industry’s sway in the U.S. heartland and underscore the growing heft and savvy of challengers who’ve become emboldened to demand higher compensation and safeguards.

In the case of High Plains, which delivers oil to Marathon Petroleum Corp.’s 74,000 barrel-a-day Mandan refinery, the U.S. Interior Department’s Bureau of Indian Affairs ordered it shut after determining the pipeline was trespassing on Native American land. The ruling also found the company responsible for $187 million in damages and gave it 30 days to appeal.

Somewhere Warren Buffett is smiling.

The Tesoro High Plains Pipeline has a capacity of 250 million bopd. Link from the Sidney Herald, October 1, 2016. Archived.

Tesoro has more than 1,000 miles of crude oil gathering and trunklines in the Bakken. Its High Plains Pipeline has a capacity of 250 million barrels per day, and it’s Bakken Area Storage Hub can hold more than 1 million barrels of oil. (sic)

Screenshot from the Sidney Herald ("We're gonna need a larger storage hub." LOL):

See first comment: 250 million bopd is a huge mistake by the reporter and the editor, and a huge miss by me (I will have to talk to Sophia about this). This source suggests the capacity is 90,000 bopd after it was expanded in 2015: https://www.gem.wiki/High_Plains_Crude_Oil_Pipeline. 

The Bakken Is Back -- Barron's -- July 18, 2020

Re-posting.

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Barron's: The Bakken Is Back

This is behind a paywall, but if you are able to access it, it's worth it. The link: https://www.barrons.com/articles/u-s-oil-companies-are-drilling-again-heres-whos-ramping-up-51595014332. You might be able to find using typical Google tricks.

Oil companies are starting to increase their drilling again, after months where they shut off wells or postponed projects. Their decisions in the months ahead, along with the path of Covid-19 could determine the longer-term trajectory of oil stocks.

After a volatile spring, oil prices have been trading around $40 a barrel for the past few weeks. Analysts don’t expect them to rise above $50 a barrel until there are more signs demand is returning -- a question mark as Covid-19 surges in the U.S.

Other countries are starting to pump more oil, too. OPEC said this week that it planned to gradually increase production.

Regarding the Bakken:

In June, the number of permits to drill wells in the U.S. rose by 15% on a month-over-month basis off a “brutal” May bottom, noted Evercore ISI analyst James West in a note. In total, federal authorities approved 1,238 permits — 126 more oil permits and 40 more gas permits than the prior month.

Small and midsize oil companies have had trouble getting financing to drill, but larger explorers and producers have fared better. Exxon Mobil and Chevron both raised billions of dollars in the credit markets after Covid-19 began to spread.

The majors, which include Exxon, Chevron, and European oil companies likeRoyal Dutch Shell account for a large share of the increased drilling permits.

Of the independent explorers and producers, Devon Energy andDiamondback Energy are expanding their presence in the Permian basin—the most productive oil basin in the U.S.—applying for drilling permits for 31 and 12 wells, respectively.

There is also more activity in the Bakken formation, which is in North Dakota and Montana. The companies adding the most wells there include ConocoPhillips and Marathon Oil, up 21 and 15 wells respectively.

It should be noted that XOM is also in the Bakken (XTO) and picking up a bit of activity.

One Hundred Eighteen Permits Renewed In The ND Bakken This Past Week -- July 10, 2020

Updates

Permits renewed in week of July 13, 2020:

Twenty-four permits renewed -- the eighth consecutive day that 20+ permits have been renewed in the ND Bakken:

• Bruin (10): ten Forth Berthold permits, all in section 19-148-94, Dunn County;
• CLR (5): two Olympia permits; two Charleston permits, and a Juneau permit all in Williams County;
• Lime Rock (5): three Mariner permits in Burke County and two Reuben Schneider permits in Dunn County; 
• XTO (3): one Harley Federal permit in McKenzie County
• Whiting: one USA Federal permit in McKenzie County

Twenty-three permits renewed (the seven consecutive business day in which 20 or more permits were renewed):

• BR (7): one Sanmuri permit,  four Muri permits, two Remington permits, all in McKenzie County;
• EOG (7): seven Burke permits in Mountrail County;
• Equinor (6): three Larsen permits and three Lucy Hanson permits, all in Williams County
• Enerplus (3): one Ridley, one Loggerhead, and one Aldabra permit, all in McKenzie County;

Twenty permits renewed, July 13, 2020:

• Hess (9): three EN-Kiesel permits in Mountrail County; six SC-JW Hamilton permits in Williams County;
• CLR (5): three Morris permits and two Carson Peak permits, all in McKenzie County; the scout tickets show these permits at PNC, so it's nice to see them renewed; the CLR Carson Peak/Morris wells are tracked here;
• XTO (4): four Twin State Federal permits in McKenzie County
• Petro-Hunt (2): one USA permit and one Louis Tully Federal, both in McKenzie County

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Later, 8:51 p.m. CDT: a reader noted that North Dakota is waiving the $100-fee to renew permits. Link here. 

Commissioners also heard a report on the Bakken Restart Task Force’s work, which is looking at ways to speed recovery for the North Dakota oil and gas sector.

Helms said a comprehensive review of regulations affecting the oil and gas industry is under way, to see if any need to be lifted.

Some things have already been implemented. Among these, a $100 fee for renewing a drilling permit has been waived beginning July 1 through Dec. 31.

“What we want is if somebody is looking at renewing a permit in Texas versus renewing a permit in North Dakota, we want to have the competitive advantage,” Helms said.

“That this is the one they renew and this is the one that gets a rig first.” 

Much, much more at the link.

A Bakken well costs in the neighborhood of $6 million plus or minus a couple of million. To renew a permit for one year: $100.

My hunch: if there's a direct correlation between permit renewals and waiving the $100-renewal fee, let's see what happens when the state cuts the production and/or extraction taxes. LOL.

 Original Post

One comment: lots of work left to be done in the Bakken.

This is really quite unprecedented. Over the past five days a total of 118 permits were renewed in the ND Bakken.

The NDIC averages about six new permits each day. In fact, this week, the NDIC reported only nineteen new permits. In comparison, there were more than twenty permits renewed each day this week.

I do not ever recall seeing this happen before.

Much could be said about this. Look at the operators below.

July 10, 2020: twenty-one permits renewed:

• Oasis (10): five Slagle permits in McKenzie County; five Domalakes permits in Burke County;
• Hess (9): two RS-State permits in Mountrail County; six S Ramberg permits in Williams County; one Beauty Valley permit in Williams County
• Slawson (2): two Nightmaker permits in Mountrail County

July 9, 2020: twenty-two permits renewed:

• Rimrock Oil & Gas (8): seven Skunk Creek permits and one Moccasin Creek permit, all in Dunn County 
• SHD (7): one permit each, all in McLean County: Epsilon, Delta, Demeter, Cheetah, Narcissus, Poseidon, and Zeta;
• Whiting (4): one Pronghorn Federal and two USA Federal permits, all in McKenzie County; a Kessel Federal permit in Williams County;
• Slawson: a Gunslinger Federal in McKenzie County;
• Liberty Resources: a Sundhagen C permit in Williams County
• Newfield: a Moberg Federal permit in McKenzie County

July 8, 2020: twenty-six permits renewed:

• BR (12): three Lillibridge permits in McKenzieCounty; two Patton permits in Dunn County; two Sandie permits in McKenzie County; two Shafer permits in McKenzie County; and, three West Kellogg permits in McKenzie County
• Rimrock Oil & Gas (6): six Skunk Creek permits in Dunn County;
• Hess (4): four BB-State A permits in McKenzie County;
• CLR (4): four Pasadena Federal permits in McKenzie County;

July 7, 2020: twenty-three permits renewed:

• CLR (10): two of each of the following: Dennis, Flint Chips (all four in Dunn County); Berlain (both in McKenzie); Charleston and Olympia (all four in Williams County);
• CPEUSC (8): four CPEUSC Narcisse permits; four CPEUSC Austin permits5, Williams County
• Lime Rock (3): three Harlson Rebsom permits in Dunn County
• EOG (2): two Austin permits in Mountrail County (spelled incorrectly on the DAR)

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The Nature Page

While kayaking with Sophia on Grapevine Lake, north Texas:

Focus On Fracking Posted -- June 21, 2020

Well, I thought my previous note was the last note of the night. Not to be.

The weekly edition of Focus on Fracking has been posted. Another incredible week.

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Please Don't Write Me On This One

I've read that the statue of Theodore Roosevelt will be removed from the Natural History Museum in NYC. Please don't write me on this one.  I find it hard to believe this statue was ever put up in the first place. What WERE they thinking?

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Don't Write Me On This One Either

John Bolton says he will vote for Joe Biden. Talk about cognitive dissonance.

Not So Bad -- At Least Not So Far -- June 6, 2020

Note: in a long note like this, there will be typographical and content errors. If this is important to you, go to the source. 

Wow, wow, wow. Exactly what I thought but didn't say anything -- I thought it was beyond the pale, as they say.

How did I miss this story?

I think I follow "shale" fairly closely, but if so, how did I miss this story? It certainly seems it was buried. I've archived it so it isn't lost. It may have been buried because the "final chapter" has not been written.

But here's the link and a few items from the story: US shale outperforms expectations in 1Q20.

It is a summary of a Rystad Energy posted on oilprice.

It begins:

Following the publication of the energy industry’s first quarterly results since the Covid-19 outbreak, a Rystad Energy analysis reveals a surprising contrast. While the oilfield service market has taken a massive hit in earnings and profit margins, US shale operators had an impressive quarter under the circumstances, which even ended up in increased dividends.

A preliminary analysis of 204 service companies finds that revenues are down 6% compared to the same period last year, while impairment charges have skyrocketed.

Profit margins for January through the end of March 2020 were down by almost 90%, and the top 50 public service companies recorded total net losses exceeding $35 billion – far greater than the quarterly losses incurred during the previous industry crisis five years ago.

Now some data points:

• sectors with greatest revenue decreases, the usual suspects
• well services and land drillers in US shale operations
• offshore project delays are also taking a toll on service revenues
• share prices have also been hit hard; falling by almost 50% since the beginning of the year
• offshore drillers hit particularly hard

Then this:

“Although the 6% year-on-year fall in 1Q 2020 revenues appears modest compared to the massive decreases of 30% or more recorded during the last downturn, our analysis indicates that we are witnessing only the beginning. Larger declines are expected in the near term. This is bad news for an industry that still has not fully recovered from the previous crisis,” says Aleksander Erstad, energy service analyst at Rystad Energy.

More data points:

• of the 39 public US shale oil producers analyzed last  year (1Q19), due to mergers, bankruptcy and delayed filings, the group analyzed by Rystad Energy fell to 35 operators in 4Q19 and 29 operators in 1Q20

Then this:

Despite the worsening market, the sector performed much better than what many expected under the circumstances.

More data points:

• 1Q20: a surplus of more than $1 billion in cash from operations compared to capital spend during the period, even though the number of operators that managed to balance out dropped back to 45%

Quote from Rystad Energy:

“It’s the fourth consecutive quarter of positive cash balancing, and the fourth quarter in the history of the shale industry when companies didn’t overspend. This is actually quite impressive, especially for first-quarter results,” says Alisa Lukash, senior shale analyst at Rystad Energy.

More data points:

• fair value changes:
• amounted to a positive $9.6 billion, which is the highest since 2014, followed by 4Q14 at $9.5 billion and 4Q19 at $9.2 billion
• dividend payments:
• surprisingly grew by almost $50 million for the peer group in 1Q20, as operators displayed an effort to shore up plunging equity prices. The ratio of dividends to capex grew to 6.4% in 1Q20, versus 5.6% in 4Q19
• stock buyouts: paused
• debt and interest: increased by $7 billion to $140 billion since Rystad Energy's previous update in late March, 2020   

Plans Disrupted -- Saudi's LNG -- May 22, 2020

For now, this simply seems nothing more than a footnote, but all the same, it does seem noteworthy. I don't know.

From Reuters:

• due to lack of LNG demand, Sempra Energy delayed its decision to proceed with an LNG export project at Port Arthur, TX
• US LNG export facilities are tracked here; interestingly, at the very top, that's how big a deal this was at one time:
• Port Arthur, TX: Sempra, Saudi Aramco -- joint ventures and expansions.
• this was supposed to have been Saudi Arabia's first foray into LNG as part of the state oil giant's plan to become a major global player in the gas market
• right now, it make sense but I keep thinking that Prince MbS's Vision 2030 plan continues to fall apart; 

This is what happened the last time Saudi Arabia tried to destroy US shale:

The tea leaves suggest it's only going to get worse for Saudi Arabia. Think about this. In 2011, Saudi Arabia was getting $120 for each bbl of oil it sold; now the country is lucky to get $20 for each bbl. That's insane. It speaks volumes on how much money the Saudis blew through on sports cars and casinos.

OPEC basket, today, May 22, 2020: $28.43.

Flashback: Surge Of New Bakken Operators During Last Saudi Surge In Production -- May 18, 2020

Announced sometime in 2014, and continuing through 2016, Saudi Arabia tried to destroy the US shale sector by flooding the world with oil.

Surge of new operators, late 2015; through 2016 (all one link).

It will be interesting to see what happens this time around.

Although no longer in the Bakken, the company I am perhaps most interested in right now: OXY (not as an investment but as spectator sport).

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Notes From All Over -- The Late Sunday Night Edition -- May 17, 2020

From oilprice this evening, link here. I wouldn't have bothered with the first banner headline but I have a link at the sidebar at the right, near the top, which links to a question I had when this all started: whether the Bakken or the Permian would be hit harder.

First item:

The second item is very, very interesting. Note the oil price rally (banner below). At least for now the price rally continues. It's fascinating but meaningless. It's meaningless because it's not predictable; it doesn't make sense; and, there is no way one can model it.

What interests me is the relative prices: comparing the various crude oils.

But what really, really interests me is the "OPEC Basket." This is the third time in about five days that I've brought this up. I assumed it was a mistake. Oilprice very, very, very rarely makes a mistake on their banner oil prices but it does happen. But if this was an error, certainly after 24 hours, or 48 hours, or even 72 hours, this error would have been corrected. But it hasn't changed. I don't get it. I still think that even if it's an error, it reflects "reality," whatever "reality" is these days.

Second item:

I checked the official OPEC site, and they show "OPEC Basket" rising but still below WTI. The OPEC site lags a bit; the most recent date is May 14, 2020 (I'm writing this on May 17, 2020), and the OPEC Basket is $24.93.

I still think things are too quiet in the Mideast which I first mentioned May 7, 2020 -- that's ten days ago. Wow, time flies.

How is the president doing with regard to the pandemic? Link here. Most recent results from the Rasmussen daily presidential poll:

Once folks get their next $2,000 check -- thank you, Ms Pelosi -- his polling numbers should rise again. What a great country.

This Headline Worth 10,000 Words -- May 17, 2020

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Bob Jones Park

Southlake, Texas

May 17, 2020

Super-Tankers Headed To China -- May 17, 2020

117 super-tankers filled with Mideast crude oil heading to China, Bloomberg, May 16, 2020.

Link here.

There are 117 of the industry’s largest crude carriers en route to ports in the Asian country, where there have been increasing signs of a pickup in oil demand following the outbreak of coronavirus. That’s the biggest number of the vessels since at least the start of 2017, and quite possibly ever. Assuming they have standard-sized cargoes on board, the ships are likely delivering at least 230 million barrels of cargo. 

The surge in flows is just another piece of evidence underpinning the idea that the country’s oil consumption is recovering at a time when many other nations are still struggling to ease lockdown measures as they combat Covid-19. China’s apparent oil demand surged by roughly 11% from March into April, and the nation’s independent refineries are processing at a record rates.

“Chinese purchases are done on geopolitical grounds and pricing ground,” said Peter Sand, the chief analyst at shipping trade group BIMCO. “The stars aligned for perfectly in 2nd half of April.”

Many of the shipments, due to arrive between now and mid-August, are likely to have been purchased last month, when oil prices briefly plunged toward zero because of a huge global overproduction of crude. U.S. barrels traded at negative prices last month amid concern about a lack of space to store supplies while, across the world, physical grades also became steeply discounted.

China’s apparent oil demand rose to 11.81 million barrels a day in April, up from 10.63 million in March, according to data compiled by Bloomberg. That means the vessels en route will deliver almost 20 days of supply.

More Evidence That Saudi Is In Deep Trouble -- Along With Kuwait, Shutting Down A Field That Might Supply 0.5 Percent Of World's Entire Oil Supply -- May 16, 2020

Updates

Minutes later, 4:39 p.m. CT; -- exactly what I said an hour ago -- there's a bigger story here --

Minutes later, 4:32 p.m. CT -- this story is getting a lot of re-tweets over at twitter.

Most interesting: "analysts" are missing the big story here. They're focusing on the 100,000 bopd production. That's not the story. The question not (yet) being pursued -- why this particular field at this particular time? A hundred thousand bopd is the proverbial drop in the bucket for Kuwait/SA combined production. Fifteen million bopd. Hundred-K / 15,000-K = 0.7%.

Minutes later, 4:14 p.m. CT -- it's now being reported in Reuters --

Kuwait and Saudi Arabia have agreed to halt oil production from the joint Al-Khafji field for one month, starting from June 1, Kuwait’s Al Rai newspaper reported on Saturday. 

of the OPEC+ group of oil producers to cut output in a bid to reduce a glut in global supplies. Both Gulf states have also said they would make additional cuts beyond the agreed curbs.  

Someone is in serious, serious trouble. Or someone is tired of giving away their lifeblood to China, the same folks who released Wuhan flu and screwed everything up for Saudi Arabia.

Original Post

Disclaimer: I was quite distracted while writing this note. There may be content and typographical errors. If this is important to you, go to the source. 

Hello, possums, to steal a word from Dame Edna, if you have been following the Khafji oil field, owned and operated jointly by Saudi Arabia and Kuwait, this is quite a story.

A huge story.

To bring you up-to-date, from oilandgas360, just a few months ago, February 2, 2020:

Saudi Arabia and Kuwait have started preparation work to resume crude oil production from the Al-Khafji oil field jointly operated by the two countries, with initial output expected around the end of February (2020), two industry sources said. Saudi Arabia and Kuwait, both members of the Organization of the Petroleum Exporting Countries (OPEC), agreed last year to end a five-year dispute over the area known as the Neutral Zone, allowing production to resume at two jointly run fields that can pump up to 0.5 percent of the world’s oil supply.

More at the link, but one assumes a lot of time and effort went into bringing this field into joint production after five years of dispute. Can you believe it, this field was discovered in 1960?

So, this field was discovered in 1960, closed five years ago for "environmental reasons," under dispute since then, and finally, after billions of riyals invested, I assume, some fifty years later, with great fanfare, pomp and circumstance, Kuwait and Saudi Arabia make a huge announcement just a couple of months ago: "Hey, we're going to re-open this huge field under joint operation!"

Inshallah.

Now, this .... drum roll .... from Twitter, less than an hour ago:

More from the oilandgas360 link:

Output is expected to reach 175,000 bpd from Al-Khafji and 145,000 bpd from Wafra after a year of restarting the fields, the official said. 

Kuwait newspaper Al-Rai reported on Sunday that production at Al-Khafji will start by the end of February and that testing of oil and gas pipelines and facilities has already begun. 

Al-Khafji is operated by Al-Khafji Joint Operations Co., a joint venture between Kuwait Gulf Oil Company and AGOC, a subsidiary of Saudi Aramco. It had been producing between 280,000 bpd and 300,000 bpd of Arabian Heavy crude before its closure in 2014 for environmental reasons.

"Environmental reasons" .... in the Mideast? LOL.

Halting oil production just three months after all the hoopla? Apparently Allah wasn't willing.

One wonders if there might be a whole lot more to the back story -- why it was decided to (apparently) completely shut down production. Certainly there were other options. I think there is much, much more to the story.

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Speaking Of Possums
and
Practicing Homeopaths

Dame Edna

Notes From All Over, The Late Night Edition -- May 15, 2020

From the [Australian] Financial Review:

Amusingly, Saudi Aramco made repeated references to COVID-19 in its results but was a little more coy in mentioning its starring role in the short, nasty and brutish price war it launched in March against its frenemy Russia.

Net income fell to $US16.6 billion from $US22.2 billion at the same time last year – and that was on a realised crude oil price of $US51.80 a barrel.

Wells idled in North Dakota, dated April 16, 2020:

State Mineral Resources Director Lynn Helms said Tuesday that companies have shut 4,600 wells since the start of March. The idled wells account of about 260,000 barrels per day of oil, The Bismarck Tribune reported.

Director's Cut, March, 2020, data posted today. 

The Permian:

OPEC Basket -- Error In Posting? Something Else? I Don't Know -- May 14, 2020

Later: this is clearly an error but it was interesting for a moment.

Original Post

 
We will have to sort this out tomorrow unless there's news tonight or a reader can explain it.

Re-posting:

OPEC basket: $17.00 -- at oilprice.com -- I can't find anything on this; not reflected at "official" OPEC website, where it still shows $23.25/bbl; this has to be in error, but it's unusual to see errors of this magnitude at oilprice.com; note Brent jumped almost 7%; here's the screenshot:

If this is accurate, it could be a "calendar"issue like the one that dropped WTI into negative territory.

I can't find anything over at Twitter to explain this. 

But it's interesting to speculate.

If accurate, do movers and shakers think that Saudi Arabia / OPEC+ won't be able to cut production? Is it possible that movers and shakers think that Saudi Arabia and Russia can't risk shutting in wells in old fields; risk losing the fields?

Saudi Arabia has a severe cash flow problem (previously posted) -- paying daily rates averaging $50,000/day or more for VLCCs / ULCCs with at least twenty of them off Long Beach Port with no plans to unload -- is Saudi Arabia looking to unload those VLCCs / ULCCs regardless of cost / loss?

I really don't know but a 30% drop in the OPEC basket has to be in error unless it can be explained.

Later: a reader commented - this is definitely an error. So, we'll see a correction first thing in the morning.

Saudi Aramco Breakevens -- Re-Visited -- May 13, 2020

This takes me back to all those discussions about the breakeven costs for Saudi Aramco and how inexpensive it is to produce oil in Saudi Arabia. Breakevens are very, very similar to those in tier 1 plays in the US.

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Highway 61 Re-Visited

Highway 61 Revisited, Karen O and The Million Dollar Bashers   ********************************** Steak Update  

Omaha Steaks: still a lot of selections "temporarily unavailable."

 

 

Another option from a reader: crowdcow.com.   

Are You Kidding Me! Re-Posting! -- May 13, 2020

Wow, wow, wow. This takes me back to all those discussions we had on whether Saudi Arabia retained bragging rights as the swing producer, or whether US shale was the "new" swing producer. We're not talking about how much oil either Saudi Arabia or US shale oil could put into off-shore tankers; we're talking about actual change in production.

Headline writers still writing "the expected narrative."

Re-posting. I'm sure I'm misreading something. 

Swing producers? US shale?  I don't know. We'll have to look at the numbers six months from now, but it certainly appears that US shale operators can "turn on a dime." I think it's fascinating. News out of the Mideast suggest weeks, if not months, of negotiations, talk, fake news, etc., and then we might finally see some data. US shale -- in the Bakken it's a daily update. In the Permian maybe a bit longer, but certainly within a month we see production responding to geopolitical events. Whatever. Idle rambling. Waiting for EIA data. [Update: five minutes later -- wow, talking about turning on a dime! See below.]

EIA, weekly data, link here, and here, pending, released at 9:30 a.m. CT -- are you kidding me? --

• US crude oil inventories decreased by 0.7 million bbls from the previous week
• US crude oil inventories now stand at 531.5 million bbls -- 11% above the already fat five-year average;

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 68	March 18, 2020	2.0	453.7
Week 69	March 25, 2020	1.6	455.4
Week 70	April 1, 2020	13.8	469.2
Week 71	April 8, 2020	15.2	484.4
Week 72	April 15, 2020	19.2	503.6
Week 72	April 22, 2020	15.0	518.6
Week 73	April 29, 2020	9.0	527.6
Week 74	May 6, 2020	4.6	532.2
Week 75	May 13, 2020	-0.7	531.5

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Five Wells Coming Off Confidential List Today: WPX; XTO; Whiting; CLR -- May 13, 2020

Snow! And very, very cold temperatures in Scotland this week. Link here. For those following "grand solar minima" (which is very new to me -- only over the past couple of years have I followed it), this is fascinating:

Monday’s polar blast has arrived with the news that six global organisations, including king warm-mongers themselves the Met Office, have combined to create a weather model for June through August, 2020 (well they’ve gotta spend all that funding on something, right, and the world is just screaming-out for MORE MODELS).

The six forecasters’ combined map shows a 1500 mile-wide “cool blob” covering the Atlantic and much of Europe.

They’ve predicted an overall UK summer temperature of 14.7C, which would be the coldest summer since 2015’s 13.9C.

However, that prediction –as with most-other things coming out of the UK Met Office– is likely on the warm side and something far-closer to 2015’s reading is probably on the cards — time will of course tell.

Tech: I see there's another browser out there competing with Chrome: Brave. I don't care one way or the other but I was talking with the granddaughters last night about their browsers. Apparently, Brave blocks ads and trackers which saves loading time. That's a huge irritant I have with current browsers -- I often watch spinning "clocks" as ads and trackers are downloaded. I have no idea. It was an ad for Brave. Brave has been around for awhile; this story from Computerworld, July 24, 2018. 

The web browser from Brave Software relies on an unusual business model: it strips out ads from websites, replaces them with its own ads, then allows users to send money to sites they like.

Boutique browsers try to scratch out a living by scratching out a niche underserved by the usual suspects. Brave is one of those browsers.

Brave has gotten more attention than most new browsers, partly because a co-founder was one of those who kick-started Mozilla's Firefox, partly because of its very unusual - some say parasitical - business model.

Florida Walt Disney World Reort: taking reservations for July 1, 2020, and afterward. 

Re-opening: if states that are re-opening are able to withstand the barrage of scare stories from the mainstream media and continue with re-opening plans, there is going to be a huge gap between states that fail to re-open and states that re-open. 

Twitter scroll: not much news but there certainly seems to be a suggestion that the worst is over for US oil. Certainly not much bad news. Considering. Bloomberg over at Rigzone.

FWIW: earlier, it was reported that experts predicted that global (?) CO2 emissions would fall 8%; today it's being reported that EIA predicts energy-related CO2 emissions to fall 11% this year. Link here.

OPEC basket: $22.71, link here. OPEC shows $22.83 today.

OPEC, May, 2020 report, various sources:

• OECD commercial oil stocks rose by almost 70 million bbls, month-over-month in March; now at 3,002 million bbls; 125 million bbls higher than last year;
• OPEC crude oil production rose by 1.798 million bbls per day month-over-month to 30.412 million bopd in May -- secondary sources
• Saudi Arabia: says it produced 12.007 million bpd in May -- if accurate, a huge production number going over 12 million bbls

Iraq: agrees to further cuts but less than OPEC+ target. 

International air travel? Emirates to begin flights from May 21, 2020, to London, Frankfurt, Paris, Milan, Madrid, Chicago, Toronto, Sydney, and Melbourne. Note: Italy on the list; NYC not.

API, weekly:

• forecast: another large increase; 4.147 million bbls (note false precision)
• actual: almost double the forecast; a build of 7.58 million bbls

EIA, weekly data, link here, and here, pending, released at 9:30 a.m. CT -- 

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Back to the Bakken

Active rigs:

$25.68	5/13/2020	05/13/2019	05/13/2018	05/13/2017	05/13/2016
Active Rigs	17	64	60	51	27

Five wells coming off the confidential list today -- Wednesday, May 13, 2020: 42 for the month; 92 for the quarter, 319 for the year:

• 36634, drl, WPX, Nighthawk 6-34HD, Heart Butte,
• 36578, drl, XTO, Tong 34X-9E, Midway,
• 36131, 972, Whiting, Elma TTT Federal 43-4H, Sanish, t11/19; cum 98K 3/20; this must be great -- producing oil, selling oil, and not paying (some) bills while in bankruptcy?
• 35383, SI/A, CLR, Palmer Federal 11-25H1, Haystack Butte, t--; cum --; 23,426 bbls over 21 days extrapolates to 33,466 bbls/30-day month;
• 35381, SI/A, CLR, Palmer 9-25H1, Haystack Butte, t--; cum --; 16,344 bbls over 19 days extrapolates to 25,806 bbls/30-day month;

RBN Energy: factors influencing US LNG offtaker decisions to lift vs cancel cargoes.

Global natural gas demand disruptions and high storage levels resulting from the COVID crisis have turned international LNG markets upside down. Price spreads for U.S. LNG exports, which were well above $1/MMBtu two months ago, have disappeared and even flipped to negative, with the UK NBP and Dutch TTF price benchmarks — and briefly also Asia’s JKM index — trading below the U.S. benchmark Henry Hub for the first time since the U.S. began exporting LNG in early 2016. Despite the uneconomic price spreads, U.S. cargo liftings have slowed only modestly so far. That’s likely to change in the coming months as both Cheniere Energy and Sempra have confirmed cancellations or modifications to lifting schedules by some offtakers, and other terminal operators are likely facing the same pressure. However, many U.S. cargoes will still move, regardless of prices. What are the economics of cancelling versus lifting a seemingly out-of-the-money cargo? Today, we begin a short series examining the factors affecting U.S. LNG cargo liftings.

A few months ago, the idea of U.S. LNG cargo cancellations was implausible. While technically possible — U.S. LNG contracts afford offtakers the ability to cancel, though not without penalty — cancellations seemed the least likely of scenarios, especially given that (1) U.S. LNG contracts are take-or-pay, meaning offtakers would pay certain fees associated with the cargo whether they lift it or not, (2) long-term, committed offtakers also have contractual obligations tied to their offtake agreements, such as long-term vessel charters and delivery commitments with utility consumers in destination markets who rely on the gas, and (3) the contracts provide plenty of flexibility on what happens to the cargo once offtakers take possession of it. These factors kept U.S. cargo liftings steady and even rising to new heights through 2019 and early 2020, as additional liquefaction trains were completed and commercialized. This, even as international price spreads shrunk.

Where We Are -- Where We Are Headed -- May 11, 2020

Yesterday (May 11, 2020) I wrote the following and placed it in draft -- I didn't know where to go from here/from there:

Three possible scenarios for the Bakken, from "good" to "bad":

• U-shaped recovery by the end of 2020
• continued fall in activity through end of 2020 and slow but unremarkable "recovery" in 2021
• relatively complete shut-down of the entire Bakken for four years

That was yesterday.  

All of a sudden, the Bakken looks trivial compared to what's going on vis-à-vis the corona virus story. I wish Hunter S Thompson was still around to put this story in perspective. I don't know if folks have seen this story ...

.... break, break ... for some reason this is as good a time as any to be listening to Led Zeppelin ...

.... I was saying ... I don't know if folks have seen this story -- Los Angeles County will be "shut down" for at least the next three months ... through July for sure --- possibly into / through August.

California State University with 23 campuses and 50,000 employees, including 27,000 faculty members, will cancel the fall semester. The ripple effects goes well beyond just those 50,000 employees. The CSU system enrolls around 500,000 students. What percent will go elsewhere? Certainly the incoming freshman class will disappear -- it will be the great diaspora as those incoming frosh will now look for new colleges. Winners and losers.

The northeast from New York to Massachusetts seems to be in a similar situation. How many of the twenty-five colleges and universities in Boston alone will open this next fall? It's hard to believe any will -- except perhaps online. Harvard says it will be open this fall, although it my be "virtually/on line." Tufts University is unsure whether it will re-open.

It looks like we're starting to see the Balkanization of the United States based on how states or regions are dealing with the pandemic.

We have states like Florida and Texas which are looking to re-open.

And, then we have states or regions like the northeast and Los Angeles County whose political leaders appear to have panicked, looking to extend the lock down and perhaps even looking to make/take more draconian measures.

Somewhere in between are the states and regions about which we don't pay much attention when it comes to stories like these.

It appears that by the end of this week the US will be trending toward 40 million unemployed.

Break, break ... google US map ...

Yes, just do that ... google that acronym "US" and add map to it .... this is what you will see ..

Is that not bizarre? Corona virus pervades "everything. Google "US workforce wiki" and what do you get? Same thing. Corona virus.

Corona virus pervades everything.

If this were a "smallpox virus" unleashed by Russia I could understand it, but I can't get my head around how the modern (?) world has responded to a virus that causes flu-like symptoms; is much less serious than "seasonal flu" for which we have a vaccine; and, predominantly affects the elderly.

But again, it's the same modern (?) world that is panicked about a two-degree change in the "global temperature."

Just thinking out loud.

No point yet to the idle rambling.

At some point, all these crises reach a tipping point. I thought we had reached the tipping point for this pandemic some weeks ago. I was clearly, clearly wrong. The question I'm trying to address: how does this play out? What will be the tipping point? Will there be a tipping point between now and when we get a vaccine, assuming we "get" a vaccine?