Notes From All Over, Part 2 -- February 1, 2021

EOG: interesting story. A bit old. I missed it when it was first reported a few weeks ago. Oil drillers are taking their money and expertise off-shore and overseas now that the new CEO/CIC has banned new leasing on federal lands/waters in the US. EOG moving focus to Oman. Appears to be a pretty big story based on the coverage of this story. Apparently the new administration prefers to put Omanis to work and let our union workers draw unemployment and play the GME and silver markets. 

The road to France: for the archives. Something for Sophia to read in 2035. The numbers simply don't add up. There is not enough land or water to add all the renewable energy that would required to replace this many nuclear plants. From Tatiana Serova, one of my favorite columnists:

On Wednesday January 27th, the International Energy Agency released a long-awaited report called “Conditions and requirements for the technical feasibility of a power system with a high share of renewables in France towards 2050”. Yet, that document was given a cold welcome by the French nuclear industry, as behind this somewhat complex title hides a key message : a scenario of 100% renewable energy is “technically possible” in 2060 in France. This implies that the country would potentially no longer need nuclear energy to meet its domestic demand.

The nuclear sector accounts for around 70% of today’s French electricity mix, and over 40% of final energy demand. Back in the 1970’s, France decided to take the nuclear path, aspiring to move away from oil and achieving energy independence. Since then, not only did the country guarantee its own security of electricity supply, but it could also export it towards neighboring EU countries. Killing two birds with one stone, France boasted some of the cheapest electricity in Europe and was proud to have an almost fossil fuels free electricity generation system.

In 2020, the priority has shifted from nuclear power towards complying with the Paris-agreement goal of being net-zero carbon by 2050. In its pluriannual plan of energy, France gave itself the objective to reduce the share of nuclear power in the energy mix to 50% by 2035. In 2020, the government announced the upcoming closure of 14 nuclear plants to fulfill this objective. The closure of the Fessenheim plant, in June 2020 left a 1,7 GW capacity gap to be compensated for with other sources of power generation.

Thank you, Dr Fauci: three weeks to "flatten the curve." One year later and not much curve flattening but certainly a lot of waves. Mostly "waves goodbye" to a lot of service jobs. Link here. 

Notes From All Over, Part 1 -- February 1, 2021

So out of touch. The school year is coming to an end by April. But I love the attempts to change the narrative. If we're still wearing masks in August, 2022 -- which is very, very likely [I think Dr Fauci said wearing masks is the near normal] -- the midterm elections will be a debacle for the incumbents, of either party.

Robbin' the hood, lol:

Reality sucks; what happened to wind, solar?

Silver, going higher, regardless: link here. Price of silver, real time, here. But LOL -- silver accounts for less than 5% of the cost of a panel. Talk about clickbait. Biden's anti-business stance will raise costs across the board for a lot more than solar panels. The latter will actually come down in price with Biden incentives. Silver, solar panels? At worst, it's a wash. At best, it's a non-story.

The surging price of silver threatens to boost costs for solar-panel producers, which account for about 10% of global demand for the metal.

Silver prices have surged to an eight-year high since Wednesday. Exactly what kinds of investors are behind the run-up is unclear, but it began with threads on Reddit that were responsible for propelling shares of GameStop Corp. to stratospheric heights.

That’s going to add to costs for solar manufacturers, which use a silver paste for electrical contacts on photovoltaic panels. At current prices, the metal accounts for about 4.7% of the cost of a panel. It doesn’t help that Chinese manufacturers are trying to boost inventory now ahead of the Lunar New Year holiday that starts next week.

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The Science Page

The Privileged Planet: How Our Place in the Cosmos is Designed for Discovery, Guillermo Gonzalez and Jay W. Richards, c. 2004

Guillermo Gonzalez describing the fourth total solar eclipse visible from India in the twentieth century, p. 3:

I was surprised at the Indians' interest in this eclipse [1995]. National television covered the event, with crews set up at three or four locations spread across the eclipse path. One of them shared our site. 

Prior to departing India, I received a videotaped copy of the TV coverage from a colleague. 

A number of scholars were interviewed on the scientific aspects of solar eclipses; others discussed Indian eclipse mythology and superstitions. 

The TV producers, it seemed, were trying to show the world that India had finally discarded religious superstition and entered the era of scientific enlightenment. But the widespread superstitious practices in evidence during this eclipse, such as people -- especially pregnant women remaining indoors, suggest they were not quite successful. 

Sort of reminded me of highly educated Americans wearing masks on their solitary walks through parks devoid of other humans, or worse, those driving their automobiles with no passengers.

Closer Look At Another Incredible Hess Labar Well -- Look How Fast They Drilled This Well -- February 1, 2021

The well:

• 37066, conf-->loc/A, Hess, EN-Labar-154-94-1003H-9, 33-061-04618, Alkali Creek, first production, 8/20; t--; cum 143K 12/20; fracked 5/28/20 - 6/5/20: 6.5 million gallons of water; 83.8% water by mass;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2020	31	19633	19756	9187	0	0	0
BAKKEN	11-2020	30	25572	25487	9101	38279	36968	1311
BAKKEN	10-2020	31	26374	26456	10437	42031	41469	562
BAKKEN	9-2020	30	30026	30017	11932	47067	44685	2382
BAKKEN	8-2020	24	41585	41384	36422	54127	34128	19999

Look at this from the file report:

• spud date: March 1, 2020; serious drilling did not begin until 8:00 a.m., March 3, 2020
• cease drilling: March 8, 2020
• target: middle Bakken
• reached KOP: 10:15 p.m. March 3, 2020 -- 14 hours to drill the vertical
• KOP:
• build began at 9:00 a.m., March 4, 2020
• landed in the middle Bakken; and completed the curve at 5:30 p.m. CT, March 4, 2020; same day
• lateral:
• began at 4:15 a.m., March 6 -- so there was no drilling for a full day (March 5 -- no drilling)
• the center of the ideal geological target area: 30' vertical depth inside the middle Bakken formation;
• overall drilling window had a thickness of 20' with the top of the target window located 20 vertical feet inside the middle Bakken and the base ending at 40' total vertical feet;
• the entire lateral drilled within the target geological area except 270' that was drilled within one foot of the base target location
• as noted, drilled ceased on March 8, 8:10 p.m. CT -- two and a half days to drill the lateral;
• max gas appeared to be 4,024 units;
• TVD: 10,515.86'
• MD: 21,070'

Notes From All Over -- February 1, 2021

Updates

Later, 10:19 a.m.: that silver trade? Losing steam, now below $29.

Original Post

Silver: last night before going to bed, I said the number to watch overnight / today was $30. The number to watch by the end of the week: $35. Well, we hit $30 overnight. Silver up over 10%; up almost $3; trading at $29.805. Link here. From SeekingAlpha:

Bigger picture: This squeeze here is aimed at banks by forcing physical delivery of silver into vaults. The Silver Trust ETF is backed by physical silver, meaning the precious metal needs to be purchased when new investments are received.

However, retail traders may find it harder to influence silver prices, compared to a single stock, given the large off-exchange market for the precious metal in which banks trade on behalf of clients.

Flashback: In 1979-80, the Hunt brothers attempted to corner the silver market by buying up one-third of the entire world supply (other than that held by governments). Within a year, the price for silver jumped 713% to a record high of $49.45 per troy ounce, but later collapsed in an event called "Silver Thursday." COMEX adopted "Silver Rule 7," which placed leverage restrictions on the purchase of commodities on margin, and the Hunt brothers had borrowed heavily to finance their purchases.

Unemployment: rates, year-over-year. Link here.  Rankings, best to worst:

• South Dakota: #1 -- best numbers, year-over-year
• Minnesota: #10
• North Dakota: #20
• Texas: #41 -- missed the top ten for worst-performing states by one one state; throw out outliers like Hawaii and Nevada, and Texas would have been at the bottom;
• California: #48

Pigeon-holing states: one wonders if states could be divided along the following lines --

• rural vs urban
• red vs blue
• tech vs non-tech
• farming vs non-farming
• manufacturing vs service industry

And, if so, which of the divisions is most important when tracking the health of the economy. I don't know, but it seems "manufacturing vs service industry" is a huge discriminator. California, at number 48th in the list of unemployment changes year-over-year, certainly suggests the service industry is a big, big deal. Which immediately brings us to Nevada, which is 100% service (if one includes entertainment as a service industry, and I do). Nevada ranked #49th. 

Melvin Capital lost 53% in January on GameStop and bad positions.

Hess To Report Two Wells Today Including Another Huge Labar Well -- February 1, 2021

Updates

Later, 8:48 a.m. CT: silver just went over $30. Whoo-hoo. Up almost 12%. Up $3.10/ounce. Trading at $30.015. It's amazing. Folks can take their silver bars and silver coins to the local coin shop, sell everything, and pay no capital gains. No records are ever kept. By the way, gold? Spot price: $1,867.

Original Post

Humor for the day: turned on television early this morning to catch the Monday morning sports shows. First thing: Lions quarterback -- quick, name the quarterback -- is traded to the Los Angeles Rams -- this is the biggest story of the day outside of the "manufactured" Patrick Reed story. Host asks if this means the res to the QB trades are about to begin. Analyst: no. This is not the beginning of QB trades. This was the easiest, the most obvious. LOL. I watching these sames shows all last week, every morning from 8:00 a.m. to 11:00, every morning last week, and not once do I recall anyone mentioning this guy's name, much less a trade from the Lions to the Rams. Another bit of common knowledge known by everyone -- after the fact. Quick: name the "former" Lions quarterback traded to the Rams.

PGA; Nick Faldo showed his true colors over the weekend. He now becomes the PGA story for the rest of the year. 

First note in my e-mail this morning: the party is over in the Bakken. Link to the Financial Times. LOL. The article began with Chesapeake Oil and moved on to Occidental, the poster children for debacles of unprecedented (?) proportions. It was a very, very long article but as soon as I saw the first thirty paragraphs on Chesapeake, and then Occidental I knew it was a re-hash of everything we've read about the shale revolution for the past five years. Or at least since Chesapeake crashed and Occidental blew up. You will hit a paywall, but easy to get around.

More: the oil industry is well known for its history of boom and bust. This is no different. 

More: by the way, except for the investors, "everybody" made money in shale -- and many made huge amounts of money in shale. Except for the investors. So, what's new?

Headlines: scanning the headlines -- wow, a very, very slow day. Oh, that's right. The huge winter storm Orlena in the east. LOL. I just switched over to the weather channel. Talk about another storm that is/was over-hyped. Headline story from the infobabes: slippery sidewalks. Yes, that was the major concern that was breathlessly reported. Today was supposed to be the "big day." Not. Not the "big day" will be Tuesday. There is so little snowfall, most of video is back in the studio with the CGI-generated videos. Slippery sidewalks. 

ISO New England / ISO New York: ISO New England. ISO NY.   

• ISO New England: 5$ coal but otherwise unremarkable. Price spiked to $90/MWh, now leveled off at $75.

• ISONY: OAC's constituents still in the "brown." Paying upwards of $110 for their electricity.

Silver: last night before going to bed, I said the number to watch overnight / today was $30. The number to watch by the end of the week: $35. Well, we hit $30 overnight. Silver up over 10%; up almost $3; trading at $29.805. Link here. 

Millennials laughing at baby boomers. GME.  

Millennials still living in their parents' basements. As for me, I love my 1,140-square foot two-bedroom apartment. I keep forgetting it's over 1,000 square feet. 

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Back to the Bakken

Active rigs:

$53.11	2/1/2021	02/01/2020	02/01/2019	02/01/2018	02/01/2017
Active Rigs	13	54	64	58	40

Two wells coming off the confidential list today -- Monday, February 1, 2021: 2 for the month, 35 for the quarter, 35 for the year.

• 37066, conf-->loc/A, Hess, EN-Labar-154-94-1003H-9, Alkali Creek, first production, 8/20; t--; cum 143K 12/20;
• 36243, conf-->loc/NC, BR, Stortroen 1D MBH, Dimmick Lake, no production data,

The new Labar well: see this post.

RBN Energy: the northeast gas market's slow march toward more takeaway constraints, part 2. 

Despite Northeast natural gas producers battling stiff headwinds last year — the lower rig count, sub-$1.50/MMBtu spot prices, lower demand, and price-responsive shut-ins in the shoulder periods — Northeast gas production volumes still managed to hit record highs in 2020, both for daily output as well as on an annual average basis. Regional production flows averaged 32 Bcf/d in 2020, up from 31.3 Bcf/d in 2019, and daily pipeline flow data shows volumes sustained year-on-year gains through January 2021. Today, we continue our series on the Northeast gas market fundamentals, this time with a sharper focus on production trends.