Four Wells Coming Off Confidential List -- July 22, 2020

Fast and furious:

• US orders Chinese consulate in Houston to shut immediately;
• Baker Hughes posts second-straight quarterly loss; EPS misses by $0.05; revenue misses by $60 million;
• Enbridge declares CAD 0.81 / share, quarterly dividend; in-line with previous; forward yield, 7.79%; payable September 1, 2020 to shareholders of record, August 14, 2020; ex-div, August 13, 2020;
• TSLA, MSFT report 2Q20 earnings after the market closes this afternoon 
• TSLA: said to have 90% chance of reporting a profit;
• TSLA forecast:
• revenue: $5.2 billioin vs $6.35 billion y/y
• adjusted loss per share: 15 cents vs $1.12 y/y
• if it shows a GAAP profit, it will mark the company's fourth consecutive quarter of GAAP profitability making the stock eligible for consideration for inclusion in the S&P 500; 
• TSLA is up almost 2%; up over $28 / share in pre-market trading
• MSFT: up slightly in pre-market trading;
• MSFT forecast:
• revenue: $35.54 billion expected vs $33.7 billion, same qtr last year
• EPS: $1.37 expected vs $1.37 in same qtr last year 
• silver spikes to nearly $23/ounce; 

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.

OPEC Basket: $44.29, nice little jump.

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Back to the Bakken

Active rigs:

$41.28	7/22/2020	07/22/2019	07/22/2018	07/22/2017	07/22/2016
Active Rigs	11	55	67	58	32

Four wells coming off the confidential list -- Wednesday, July 22, 2020: 55 for the month; 55 for the quarter, 501 for the year:

• 37072, loc/NC, WPX, Wolverine 21-22HY, South Fork,
• 35914, SI/A, CLR, Wahpeton 16-16H1, Banks, t--; cum 116K over 3 months, 7 days; the CLR Wahpeton wells are tracked here;
• 35743, SI/A, Whiting, Ogden 14-3XH, Sanish, t--; cum 64K 5/20;
• 35696, SI/A, Oasis, Joplin 5397 42-32 8T, Banks, t--; cum 64K 3 months; the Oasis Joplin wells are tracked here;
  

RBN Energy: Shell plans to sell another refinery; this time in Louisiana's refinery row. Archived.

Earlier this month, Shell announced that it was exploring the sale of yet another refinery — this time, it is the company’s Convent facility in Louisiana, which is one of the two refineries in the state that remain with Shell from the unwinding of its former joint venture with Saudi Aramco. Convent, with a capacity of 240 Mb/d, is near the middle of the pack in terms of refinery size and possesses some unique characteristics that could make it an attractive option for the right buyer and market conditions.

But Shell’s announcement also raises a question, namely, how does the prospective sale compare with the company’s stated intent to focus on a smaller set of refineries integrated with Shell’s key trading hubs and petrochemicals operations? Today, we review the refinery’s characteristics and how it stacks up against its nearby rivals.

And it's waffle Wednesday!

Weekly Waffle Day

Huge Day Tomorrow -- July 21, 2020

Huge day tomorrow, Wednesday, July 22, 2020:

• EIA weekly petroleum report, 9:30 a.m. CDT
• gasoline demand; weekly report
• after market closes:
• TSLA, 2Q20 earnings
• MSFT, 2Q20 earnings 

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Toll House Tuesday

Now, on to Waffle Wednesday. 

A Thank You To Readers And A Note On Record Amount Of Oil To Be Burned By Saudi Arabia To Power Air Conditioning -- July 21, 2020

First things first: a huge "thank you" to readers, again. A reader caught a huge mistake in an article that I linked. I completely missed it so I consider that an error on my part also. And it was a huge error (pipeline capacity stated to be 250 million bopd when in fact closer to 25 thousand bopd). But the error was quickly noted and corrected.

But that's only half the story. The other reason to thank readers: folks don't alert me to minor typographical errors that don't affect the story and which I generally eventually find and correct later. Sometime much later. But it's nice to not be "nickeled-and-dimed-to-death" on every inconsequential typographical error.

But please let me know if I make any significant errors, typographical or otherwise.

And so we move on.  

One of the reasons I love to blog: had I not blogged about the Bakken, I never would have paid attention to this. I must have first learned about it ten years ago; I forget. But here we go again. Another "summer story" in which Saudi Arabia uses record amounts of crude oil to produce electricity for air conditioning. From Bloomberg:

As the Middle East enters the hottest days of summer, Saudi Arabia is set to burn potentially record amounts of crude oil to run its power plants and keep its citizens comfortably air-conditioned.

Electricity consumption always soars around July and August, when temperatures in the kingdom can rise above 122 degrees Fahrenheit. That compels the government to use crude or fuel oil in addition to the much cleaner natural gas that normally fires the plants.

But this year the urge to drain oil is even stronger because of higher demand, with the coronavirus pandemic forcing many Saudis to cancel their summer holidays abroad.

Another difference is that record cuts to Saudi Arabia’s oil production since April -- part of a push by OPEC members to prop up prices in the face of the virus -- have reduced its supplies of gas, most of which come from the same wells as crude.

The extra oil going toward power may limit the price impact of OPEC’s plan to taper output restrictions from next month. The kingdom pumped 7.5 million barrels a day in June, the fewest since 2002, according to data compiled by Bloomberg.

Of those, it exported 5.7 million barrels daily, while keeping most of the rest for domestic refineries.

“They can simply import more gas or burn more crude in power generation,” said Carole Nakhle, chief executive officer of London-based consulting firm Crystol Energy.

“The second option is more likely and easier since the region has been doing this for years and decades and there is plenty of oil around today.”

Each August, Saudi Arabia uses 726,000 barrels of crude daily for power generation, according to average numbers over the past decade from the Riyadh-based Joint Organisations Data Initiative, which collates statistics among energy producers.

That’s more than double the amount for the cooler months of January and February. The record came in July 2014, when the Saudis burned 899,000 barrels a day.

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ISO New England Today

Whiting With Two New Permits: MRO Reports Two Huge DUCs -- July 21, 2020

EU stimulus package: close, but no cigar. $572 billion. Won't be nearly enough. "Green" focused. Really, really bad news. For the EU. LOL.

WTI: up 2.82%; up over a buck; trading at $41.96 and, then, a speed bump -- large, and again (how many times have we heard this?), an unexpected crude oil build. The API consensus, predicted an inventory draw of almost 2 million bbls. In fact a whopping increase in crude oil inventories: 7.5 million bbls. If they were basing their estimate on the declining number of rigs, it sort of expalins how they missed the number.

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Back to the Bakken

ICYMI: Tesoro High Plains Pipeline shutdown; failed to obtain lease through reservation. Affects MRO / Marathon refinery in Mandan; posted earlier.

Active rigs:
 

$41.96	7/21/2020	07/21/2019	07/21/2018	07/21/2017	07/21/2016
Active Rigs	11	55	67	59	31

Two new permits, #37729 - #37730, inclusive:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments: 
• Whiting has two new permits 
• Foreman Federal, lot 3 section 4-152-92, 565 FNL 1665 FWL, Sanish oil field,
• Pennington, lot 1 section 4-152-92, 451 FNL 846 FEL, Sanish oil field

Four producing wells (DUCs) reported as completed:

• 35891, conf, Whiting, Sondrol 11-29H, Pembroke, producing, a 23K month;
• 35892, SI/A, Whiting, Rauser 11-29H, Pembroke, t--; cum 83K in 3.5 months; a 29K month;
• 34601, drl/A, MRO, Salveson USA 24-21H, Reunion Bay, t--; cum 170K 3.5 months; a 54K month;
• 34602, drl/A, MRO, Gerhardt USA 14-21H, Reunion Bay, t--; cum 145K 3 months; a 56K month;

Three permits renewed:

• Petroshale: two Anderson South permits, and one Petroshale US permit, all in McKenzie County;

Two permits canceled:

• Petro-Hunt: two Eric Stratton Federal permits in McKenzie County

Dry hole:

• 34677, dry, EOG, Clarks Creek 65-07H, McKenzie County

Producers now abandoned: 8, of interest:

• 10103, Liberty Resources, Iverson State A 1,  

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Additional Information Regarding Some Of The Wells Above

The wells:

• 10103, PA/32, Liberty Resources, Iverson State A 1, Glass Bluff, t1/185; cum 13K 7/93; last produced in 1993; very erratic production for years; 

• 34677, dry, EOG, Clarks Creek 65-07H, McKenzie County, from the file report:
• spud December 25, 2020 (sic) (must have been 2019)
• KOP: 0700 hours, January 11, 2020
• curve began at 1730 hours January 11, 2020
• curve TD reaced at 0600 hours January 12, 2020
• lateral 
• begun at 0130 hours, January 15, 2020
• abandoned at 14,226' MD on 1/16/2020 due to lower shale strike 

• 34601, drl/A, MRO, Salveson USA 24-21H, 33-061-04204; Reunion Bay, t--; cum 170K 3.5 months; a 54K month; fracked 1/12/2020 - 1/26/2020, 8.3 million gallons of water; 99.99965% water by mass;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2020	31	35603	35645	20017	52348	0	50209
BAKKEN	4-2020	30	53827	53895	45437	65539	0	62381
BAKKEN	3-2020	29	46754	46820	44990	52231	0	49489
BAKKEN	2-2020	15	33998	33589	65974	40193	0	3821

• 34602, drl/A, MRO, Gerhardt USA 14-21H, 33-061-04205; Reunion Bay, t--; cum 145K 3 months; a 56K month; fracked 1/12/2020 - 2/10/2020; 7.7 million gallons of water; all water?

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2020	31	31310	31352	16385	43477	0	41605
BAKKEN	4-2020	30	48352	48515	39310	58332	0	55495
BAKKEN	3-2020	30	55850	55549	43312	59891	0	56616
BAKKEN	2-2020	5	9038	8929	8337	9030	0	8507

FracFocus, screenshots:

34601:

34602:

Looks Like Russia Can't Make It On $40-Oil, Either -- July 21, 2020

Link here. Russia, hit by coronavirus crisis, considers military spending cuts -- Reuters.

The Russian finance ministry has proposed the government cut state spending on the military by 5% between 2021 and 2023. The proposal, published on Monday, also includes budget spending cuts of 10% for the court system, the servicing of Russia’s debt and wages for civil servants. 

Russia, which flexed its military muscle with its 2014 annexation of Crimea from Ukraine and intervention in the Syrian conflict, dropped out of the list of the top five biggest military spenders in 2018 after its spending fell 3.5%.

Dropped out of the top five?

US, China .....

The Moscow Times said Russia returned to the "top 5" in 2019 after "briefly" falling tinto sixth place the previous year. If accurate, the top five for 2019, global share in parentheses:

• the US (38%)
• China (14%)
• India (3.7%)
• Russia (3.4%)
• Saudi Arabia (3.2%)

Knowing the US spent $732 billion in 2019, one can work backwards from that. 

Or knowing that global military spending totaled $1.917 trillion in 2019 -- about what the market cap of Apple, Inc, is forecast to hit within the next year or so.

Russia: 4% of $2 trillion: $80 billion.

Market cap of EOG: $30 billion.