Notes From All Over -- Nothing About The Bakken -- The Thanksgiving Turkey Edition -- November 16, 2021

For newbies, I live just a mile or so west of the Dallas-Ft Worth International Airport (DFW). We live right at the dividing line between Grapevine, TX, and Euless, TX. Our residential area would be considered upper middle class, I suppose. 

Earlier today I mentioned that I was going to ride my bike down to Walmart just to check things out, not buy anything.

A beautiful day for a bike ride. At the gate outside our little hovel, if I turn right, I ride to Target in about two minutes (it takes longer to lock up the bike and find my mask than it is to ride there). If I turn left, I take a beautiful trail to Walmart about seven minutes riding time at most. 

It was early, about 9:30 a.m. and the parking lot was not as full as I expected. I don't think I have been to this Walmart since before the Covid lockdown -- don't know for sure; can't remember, but it's been a long time. I was impressed with how clean and uncluttered the store appeared. I remember Walmart stores being cluttered with merchandise in the aisles but not today. It almost had a Target appearance: open, uncluttered, clean. 

Whatever.

A casual observer might not have noticed, but it was clear that there supply chain issues. Some shelves were completely empty, but not particularly remarkable; lots of "gaps," as it were; and, often grocery items were not as deep back into the shelves as would be normal. But clearly, no one is going to go hungry in the US if they can afford to shop at Walmart. 

McCormick spices has had significant problems; the CEO was interviewed on CNBC some weeks ago because of the "spice" problem. Since then it has gotten a lot better. 

I was mostly interested in the price of turkeys and the price of bacon. From my note over at Schwa Nation:

Turkeys, just prior to Thanksgiving:

• Butterball: $0.98 / pound (vs $0.99 / pound at Target)
• Honeysuckle: 87 cents / pound

Bacon:

• brand (52 cents / ounce) to store brand (28 cents / ounce)
• about $8 for a pound of a bacon; $10 for a pound and a half

In the toy section, I checked out Lego which seemed to be the hardest hit at Target (in the toy section). It was the same at Walmart. Almost completely out of Lego sets. Enough there to get a present or two, but very, very limited selection. If there are normally 500 Lego sets, it appeared there were less than fifty today.

But most interesting: Amazon never seems to be out of stock. Of anything. 

Anyway, enough of this for now.  

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Bull Market

The market was on fire today. The S&P 500 came within a point of hitting an all-time high. The Dow closed well below its high for the day but overall, an incredible day. 

Generally speaking, the talking heads were remarkably bullish. I've posted my reasons why I think the bull market will go on for quite some time. 

I've mentioned before about all the cash Americans have but no one else seems interested. I will post my favorite graphic later but here it is mentioned in this article: Goldman Sachs expects bull market to extend into 2022. Morgan Stanley is saying the same thing. But back to the linked GS article:

Households own half of the $28 trillion in U.S. cash assets, an increase of $3 trillion since before the pandemic. We expect households will shift some of this capital into equities over time," adds Kostin.

Here it is, my favorite chart.

Money market monitor:

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Stump Siri

I am quite disappointed in Siri, LOL. The following was on the radio earlier this evening. I was curious: would Siri recognize this song / did she have it on her playlist? She did not recognize the song. Are you kidding me?

I Can't Help Falling In Love, The Stray Cats

Request For Reader's Help. Any Update On Rampart's Coteau Wells? November 16, 2021

For background, see this post from June 28, 2021 -- just a few months ago.

Rampart Energy Company:

• has been operating in North Dakota since 1959
• Rampart Energy has about 50 records on file
• Coteau 1: wildcat, SWSW 1-145-88; a "long way" from the Bakken;
• south of the lake; well east of the Bakken; southeast (outside) the Ft Berthold Reservation;
• if this is a crude oil well (not a natural gas well), this will be interesting to follow
  
• from "Bakken operators:

Rampart Energy Company 

• June 16, 2021

• Rampart's wildcat, Coteau 1, will be sited in SWSW 1-145-99, Mercer County, 555 FSL and 460 FWL; the oil field is also a wildcat; 
• Rampart has about 50 permits in North Dakota; it has been active in North Dakota since 1959; 
• Rampart's previous well in North Dakota, #27081, Craig Allen 10-3H, Stanley oil field; SESW 11-155-91; a Bakken well that was drilled in 2015 and has reported a respectable 228K bbls crude oil cumulative;

Now today: I believe these are carbon capture exploratory wells. To the best of my knowledge, NDIC is not updating the map or the scout tickets, so it's difficult to figure out what's going on. 

A reader writes:

I see they have a rig drilling the Coteau #1. I'm assuming it's for carbon capture? 

But a buddy of mine said there's what looks like 2 more drilling locations ready to MIRU between I-94 and Beulah on highway 49. Any insight on this?

If any reader has any update on the Rampert Energy rigs drilling these wells, readers would appreciate an update.

Later: 

This must the location the reader's buddy was reporting when he/she said there appeared to be two more drilling locations ready to MIRU between I-94 and Beulah on Highway 49. So far my sleuthing only comes up with Milton Flemmer 1. If the buddy is correct, we may also be looking at Milton Flemmer 2 but that's a bridge too far right now. 

See this post from October 20, 2021:

• Summit Carbon Solutions has a permit, #38622, for an Archie Erickson 2 well, to be sited in SWSW 12-142-88, a wildcat, to be sited 902 FSL and 794 FWL

So, the first map:

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Featured Artist Of The Day: Johnny Rivers

Wiki entry: enough trivia to last a full cocktail party.  

Secret Agent Man, Johnny Rivers

Update On The Trenton GTL Plant -- November 16, 2021

See this post for background.

Update here.

Agreement with Cerilon GTL. Williams County:

• will provide a no-interest $6 million loan agreement
• three loan payments of $2 million each
• first won't be disbursed until company has executed a land purchase agreement (which could happen today)
• the second payment: March, 2022
• the third payment: July, 2022
• loan to be repaid in quarterly installments once commercial operations begin or after seven years, whichever comes first.
• for the $.28 billion gas-to-liquid plant in Trent, previously announced.

Construction to begin 2021.

Initial capacity: 24,000 bbls per day of ultra-low sulfur diesel and other specialty products.

About 80 full-time employees.

Oasis With Five New Permits; Two DUCs Reported As Completed -- November 16, 2021

NOG: Permian Basin expansion, link here to press release -- and Hart Energy here --

• will acquire non-operated properties in the Permian Basis from entities affiliated with Vertias Energy, LLC
• assets primarily located in Lea and Eddy counties, NM, and Loving, Reeves, Ward and Winkler counties, TX
• deal:
• $406.5 million in cash
• 1.9 million common equity warrants; exercise price of $28.30
• 31.7 net producing wells
• 5.6 net wells in process
• 4.0 AFE'd or permitted net wells
• 40.8 risked net future development locations
• assets managed by Mewbourne, Devon, COP and EOG
• should close 1Q22
• current production:
• 11,500 boepd
• on closing, looking to increase quarterly dividend 50% to 12 cents per share, from current 8 cents per share, marking the third increase in NOG's dividend since its initiation in 2Q21
• back of the envelope: $406.5 million + warrants / 11,500 boepd = $42,000 / flowing bbl

NOG offering, link here: 10 million shares. NOG trading around $23. Update, November 17, 2021: NOG announces pricing at $20/share. Link to press release here.

S&P 500: missed an all-time high at the close by about one point.

Ten-year treasury: creeps / crept higher; a bit over 1.6%.

Asia, post-Covid: opening up. Apparently all of Asia is starting to open up; Malaysia is completely open.

$5 trillion in government spending bills in the last year or so still working its way through the economy; the most recent $1.5 trillion infrastructure bill was just signed by the president this week.

The Fed, easy money for as long as the eye(s) can see:

• even with tapering, they continue to buy assets: that buying won't be completed until next year, at the earliest, March, 2022, but then, the increased in the Fed rate will proceed very, very slowly; it will still be "easy money" as far as the eye can see
• the Fed needs to raise rates for a number of reasons: the most important? a high enough rate to allow a cut if temporary easing is needed (and it will be); in other words, putting that arrow back in the quiver;
• the Fed can't raise rates more than one percent for one simple reason: the US government won't have the cash to pay the interest .... without raising the debt ceiling
• some of that is finally starting to sink into the collective psyche of traders and investors

Semiconductors: on fire today; Morgan Stanley says the semiconductor shortage has been resolved.

Surge in oil prices: some say the "worst" is over. Flat for awhile, and then gradually come down next year.  

Final trades on Fast Money: Apple, Merck, Ford, and Target.

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Back to the Bakken

The Director's Cut was released today; September, 2021, data. 

Active rigs:

$80.75	11/16/2021	11/16/2020	11/16/2019	11/16/2018	11/16/2017
Active Rigs	23	14	57	63	55

Five new permits, #38652 - #38656, inclusive:

• Operator: Oasis
• Field: Dimmick Lake (McKenzie)
• Comments:
• Oasis has permits for five Ramirez wells in SESW 32-151-96; 
• sited between 277 FSL and 278 FNL and between 1931 FWL and 1799 FWL (my hunch is that there is an error there; probably all between 277 FSL and 278 FSL and between 1931 FWL and 1799 FWL; we'll see.

Two producing wells (DUCs) reported as completed:

• 36124, 2,228, Slawson, Stallion 8-1-12TFH, Big Bend, first production, 9/21; t--; cum --;
• 36797, drl/TASC-->807, Hess, BL-Myrtrice-156-96-2536H-6, first production, --; t--; cum --;

Director's Cut -- September, 2021, Data

Usual disclaimer: this is done for my benefit. I do it quickly. There will be content and typographical errors. I generally do not go back to correct errors. If this is important to you, go to the source.

Link here. 

From The Williston Herald: North Dakota production rises a half percent, but is still behind New Mexico by just a nose. Link here.

North Dakota added another rig this month, along with a half percent bump in production to 1.113 million barrels per day. That wasn’t enough to bump the state out of third place in the nation’s top oil producing shale plays, but it did bring it very close to New Mexico’s 1.12 million barrels per day in the Permian.

North Dakota Department of Mineral Resources Director Lynn Helms said North Dakota doesn’t actually have to match New Mexico’s rig count of 81 to beat New Mexico production. A Bakken rig produces almost twice as much as rigs in the Permian, based on data from the Energy Information Administration, the agency that tracks national energy data.

“We just have to get to 50 and then we’ll start to gain on them,” Helms said. So we’ll just keep track of that and we’ll watch that number.”

Well completions for the month were one above the state’s revenue forecast at 41, and prices were 32 percent above forecast.

Comments:

• an incredibly good report;
• natural gas capture rate up from 92% to 94%
• look at that crude oil price appreciation from August, 2021
• two consecutive months with increased production m/m
• rig count pretty much steady but up slightly
• DUC count down slightly, but not worth a headline
  

Crude oil production:

• September, 2021: 1,113,410 (preliminary)
  
• August, 2021: 1,107,359 bopd (final)
  
• July, 2021: 1,076,594 bopd (revised)
  
• June, 2021: 1,133,498 bopd
• delta, bopd: +6,051 bopd
• delta, percent: +0.55%
• revenue forecast: 1.2 million --> 1.1 million --> 1.0 million bopd

North Dakota light sweet crude price:

• today: $74.75
  
• September: $73.75
  
• August: $60.94
• July, 2021: $64.80
• June, 2021: $63.62
• revenue forecast: $50

Natural gas production:

• September, 2021: 3,015,567 mcf/day: +1.83%; 94% capture rate (final)
• August, 2021: 2,961,434 mcf/day; +2.85; 92% capture rate (final)
  
• July, 2021: 2,879,408 mcf/day; capture, 90% (revised)
  
• June, 2021: 2,987,829 mcf/day; capture, 92%

Rig count:

• today: 34
• September, 2021: 27
  
• August, 2021: 29 (included two SWD rigs))
• July, 2021: 23 (ditto)
• June, 2021: 20 (maybe one SWD rig)

Wells:

• October, 2021
• permitted: 37
• completed: 41 (preliminary)
  
• September, 2021
• permitted: 69
• completed: 34 (revised, but same as reported initially)
• inactive: 1,696
• DUCS: 503
• producing: 17,041 (preliminary -- new all-time high)
  
• August, 2021:
• permitted: 79 (final)
  
• completed: 47 (final)
  
• inactive:1,672
• DUCs: 521
• producing: 16,956 (final)
  
• July, 2021:
• permitted: 40
• completed: 53 (final)
• inactive: 2,082
• DUCs: 521
• producing: 16,890
• June, 2021:
• permitted: 75
• completed: 41 (final)
• inactive: 1,839
• DUCs: 680
• producing: 16,844 (all-time high)

 DUCs and inactive wells are tracked here.