COP: Wow! September 20, 2021

Updates

September 21, 2021: Shell says it will return $7 billion back to shareholders in terms of dividends (and share buybacks). If one does the math, it's less than a $2/share and I doubt "we" will see more than an additional 50 cents/share in dividend. In the big scheme of things, this won't amount to a hill of beans for most mom-and-pop retail investors.

Original Post

Wow! Shell confirms sale of Permian Basin assets to COP for $9.5 billion. In cash.

• one of the largest recent deals in the shale patch;
• Shell will use cash proceeds to fund $7 billion in additional shareholder distributions
• the rest to strengthen the balance sheet
• bottom line: doesn't sound good for Shell
• see social media comments at link;
  

Reuters link:

• Shell exits the largest US oilfield as it shifts to renewable energy
• for COP: second sizable acquisition in a eyar
• acquires 225,000 net acres
• $9.5 billion / 225,000 net acres = $40,000 / acre
• also announced an increase in its quarterly cash dividend; a 7% cash increase;
• Shell sold its Appalachian gas assets last year
• in western hemisphere, what does Shell have left?
• GoM; and,
• a joint venture in California with XOM -- although it's been reported that Shell wants out of that venture also;
• California intends to ban all oil production;

OXY: apparently has put in a counter-bid. Apparently, $40,000 / acre way too cheap for OXY. At twitter, but probably satire.

Shell: a shell of itself ...

Montney? Tracked here. A natural gas play.

Vaca Muerta? Tracked here. Dead. As in "dead cow." It will live up to its name.

Seven sisters has become:

• BP
• Chevron
• XOM

... and that's it. Shell is gone.

Total (Total Energies/TTE) and ENI and that's about it. 

COP? Natural gas, not oil?

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Brownies

With that news, time for a brownie:

NDIC's Active Rig LIst Is "Down"; No New Permits -- September 20, 2021

Investing: five oil stocks that doubled returns in 2021. Link to Alex Kimani. 

• Antero Resources
• Range Resources
• CLR
• Magnolia Oil & Gas
• PDC Energy

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Back to the Bakken

Active rigs: now the "rig list is under maintenance at the NDIC. Anticipate list updating again by end of week." The IT database has been compromised since mid-July, and now the daily active rig list is "down." 

$70.70	9/20/2021	09/20/2020	09/20/2018	09/20/2017	09/20/2016
Active Rigs	23	11	66	55	32

No new permits.

Two wells released from confidential status:

• 38154, conf, CLR, Candee 12-9HSL1,
• 38153, conf, CLR, Candee 13-9HSL,

Four permits renewed:

• QEP: four MHA permits in section 28-148-92; Dunn County;

Focus On Fracking -- And Breaking News: COP Increases Dividend By Seven Percent -- September 24, 2021

Breaking: COP increased its dividend by seven percent. I think a lot of folks "blow off" these dividend increases, but think about this. If one has accumulated enough COP that it is providing an annual "salary" that competes with one's social security, imagine what a seven percent jump in that dividend means. It's not often one gets a seven percent increase in social security.

Link here for "Focus on Fracking."

The lede:

• US crude oil supplies at a 24-month-low; pre-pandemic;
• gasoline supplies at a 22-month low; pre-pandemic;
• total supplies at a 42-month low; well before the pandemic;
• August global oil shortage was another 2.8 million bopd

But at the moment, natural gas is THE story:

• natural gas prices are at a 7 1/2 year high;
• natural gas prices almost set a twelve-year high before falling back;
• natural gas prices finished the week higher, but well off the week's highs
• at $5.00 ... but in Europe:
• natural gas prices rose 3.4% on the week
• pulled higher by prices near $19 in Asia and $23 in Europe

Wow, I'm in a great mood:

• the market provided a buying opportunity today;
• I accumulated shares in a dividend-paying natural gas pipeline company today;
• I will continue to accumulate shares in this company (or perhaps other companies) each day this week as long as the prices remain this depressed
• these are long term holdings; at the end of the day, my grandchildren will not care what I paid for them; they will simply be happy to have this many shares;
• meanwhile, their parents (our two daughters) will see dividends well beyond what anyone in our family imagined twenty years ago;
  

Speaking of which: a distant aunt -- perhaps a great-aunt -- on the Hispanic side of the family celebrated her 100th birthday last week. Still living at home; and rumored to be the #1 gossiper in the neighborhood. I wonder if she was vaccinated? Ambulates on her own; no wheelchair. No hearing aid? No glasses? It must be the Scotch. Or tequila.

Notes From All Over, Part 1 -- The Market Edition -- September 20, 2021

Market collapse (9:05 a.m. CT) -- if one can consider a 1.8% drop a "collapse." LOL.

• pre-market, Dow down as much as 630 points
• shortly after market opens, down about 500 points now (9:05 a.m. CT)
• and, now, right on cue, it's being reported that the purported cause for the market collapse -- the Chinese real estate bubble -- might be addressed by either other Chinese players and/or central banks
• WTI already recovering a bit

Travel restrictions: Biden will loosen. Huge story. But you will need to be fully vaccinated to go to London. Travelers, movers, shakers, the elite fully vaccinated (or have forged documents saying they are fully vaccinated). 

For the archives:

• US equity market down two percent in pre-market trading
• WTI: $70.71
• DXY: 93.332, up 0.090; rush to safety?
• TYT: 1.318%; yawn; down 0.053%

Definition of irony: shortage of carbon dioxide. I cannot make this up. Reported previously but in the news today. Over at twitter: 

Solar: this is absolutely one of the least important stories this year, maybe this decade, but it's a great "educational" story. World's longest-operating solar thermal facility is retiring most of its capacity. Link to EIA. Will likely post as a stand-alone.

Norway to the rescue: will raise gas exports to Europe. 

Norway will allow state-controlled Equinor and its partners to increase gas exports from two offshore fields for the next 12 months amid concerns over a shortage of European gas supplies that have sent prices soaring. The increase corresponds to nearly 2% of Norway’s annual pipeline gas exports. Link here.

The front-month gas price at the Dutch TTF hub, a European benchmark, has more than tripled this year to record levels, driving up power prices as the winter heating season approaches with below-average levels of gas in storage.

Asia: outbidding Europe for natural gas. That's the main reason Europe is in such trouble. Link to Bloomberg.

 Hunger games: Hollywood. Link here. 

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Crafty

Two Wells Coming Off Confidential List; WTI Trending Toward $70 -- September 20, 2021

LOL. Jim Cramer now says he has been telling folks to sell all last week. I heard a lot of "buy, buy, buy" when folks were calling in. Jim Cramer has his "trader" hat on this morning. He will put his "investor" hat on during his Mad Money later today. To be fair, Jim Cramer was very, very negative all last week, reminding folks that September is historically the worst month, and that we should prepare for two to three weeks of sell-off. He said this week would be particularly tough.

Market: great, great, great buying opportunity. We're off three percent from all-time highs. WTI drops below $72 -- lowest it's been in .... about a week.

China: the real loser?

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Back to the Bakken

Active rigs*, updated COB:

$70.56	9/20/2021	09/20/2020	09/20/2018	09/20/2017	09/20/2016
Active Rigs	23	11	66	55	32

Wells coming off the confidential list: 

Monday, September 13, 2021: 24 for the month, 35 for the quarter, 215 for the year:

• None.

Sunday, September 12, 2021: 24 for the month, 35 for the quarter, 215 for the year:

• 37887, conf, Crescent Point Energy, CPEUSC Sylven 2-14-23-158N-100W-MBH, Winner,

Saturday, September 11, 2021: 23 for the month, 34 for the quarter, 214 for the year:

• 37886, conf, Crescent Point Energy, CPEUSC Sylven 2-11-2-158N-100W-MBH, Winner, 

RBN Energy: adding structure and credibility to carbon offsets, part 4. 

In the recently fervent efforts of oil and gas companies to mitigate their environmental impact and improve their standing with investors and lenders, they are progressively striving to cut their own emissions of greenhouse gases and to offset the GHG emissions that are unavoidable through the use of carbon credits. Cutting emissions from well sites, pipeline operations, refineries, and the like won’t be easy or cheap, but at the least the results are measurable and provable — before, we emitted X, and now we emit X minus Y. The true value of voluntary carbon credits is more difficult to calculate. Sure, each credit is said to equal one metric ton of carbon dioxide or its equivalent, but how do you really measure with any certainty how many metric tons of CO₂ will be absorbed by 1,000 acres of preserved forest in Oregon, or how much methane won’t be produced by changing the diet of 1,000 cows in Wisconsin? And how can you be sure that slice of Oregon wouldn’t have been left in place anyway, or that the dairy farmer has actually changed what he’s feeding his herd? In today’s RBN blog, we look at voluntary carbon credits, concerns about their validity, and ongoing efforts to ensure that they actually accomplish the goal of GHG reductions.

Only a few years ago, companies in every part of the oil and gas industry were trying to wrap their heads around the Shale Revolution and what it would mean for them. Producers were grappling with how to fine-tune their drilling and completion techniques to wring more crude oil, natural gas, and NGLs out of their rock. Midstreamers were repurposing existing pipelines and building new ones to accommodate mammoth production growth in the Marcellus/Utica, Bakken, and other fast-growing shale plays. Refiners were looking at crude-slate changes and physical alterations to their facilities to make fuller use of the light sweet crude the U.S. was suddenly producing in abundance.