Active Rigs In North Dakota -- Anticipation -- September 24, 2021

From a reader, the following will be added to the post were I now follow active rigs in North Dakota. 

September 24, 2021: a reader provided additional information that can be added to previously posted information -- with these additions, one could argue that the number of active rigs in North Dakota might trend toward 40 in early 2022; drillers drill throughout the year in North Dakota, but due to severe winters, some of this could be delayed to 2Q22. Fracking really slows down in the first quarter due to weather. 

• Crescent Point has B21 running now. 
• Oasis has picked up B26 from Liberty. 
• Hess: rumors that it will be picking up X25 in beginning of 22; 
• Greyson Mill will start a drilling program in 22 (rumor from reader, "I have heard...". 
• Whiting to add 1,
• Ovintiv possibly add 1, 
• Iron Oil and Gas add 1,
• Koda Resources to add 1 rig for a 4-hole pad,
• Continental to add 1 more,,
• Sinclair to add 1 rig for a single well. 
• Reader "wouldn’t be surprised if the operators that add continue extending contract term length as oil prices stay above $65." 

I "predicted" CLR, Whiting might add a rig; that CPEUSC would have a rig (apparently they do). I forgot about Koda Resources and Iron Oil and Gas. I actually thought about Iron Oil and Gas last night -- this is nice to see.

Notes From All Over -- The Dockets Edition -- September 24, 2021

WTI: might WTI hit $74 today? At 1:52 p.m. CT only seven cents away from $74.

Hearing dockets: one of the highlights each month with regard to the Bakken is the posting of the monthly hearing dockets. Two things jumped out at me in the October, 2021, dockets:

• Slawson broke up some large drilling units into much smaller drilling units; this should be good news for small mom-and-pop mineral owners;
• EOG, on the other hand, continues with large drilling units;
• but did you notice this? the tea leaves for the past year suggested EOG was about to exit the Bakken; now, in the October, 2021, hearing dockets, we see EOG eyeing additional permits; they could be sprucing up their mineral acreage prior to putting their Bakken assets on the auction block, but that is not something I would expect to see; that seems to be a stretch; 
• in addition, there have been at least two operators (Oasis, and, more recently, COP). who have reiterated interest in the Bakken. 

Covid hypocrisy:

• A-listers test positive
• either breakthrough (highly unlikely) or never vaccinated [Later: they say they were vaccinated; details not provided; fully vaccinated?]
• bigger question: why were they allowed on set before they had results back; why was set not completely closed down after two of the four tested positive?
  
• obviously asymptomatic; others coughing throughout rest of show;
  
• what are the odds? just how widespread is asymptomatic Covid; it must be "everywhere"; how many folks are not being test everyday .. like 329 million?  (in the US)
  
• these are the elite who attend Obama-like events where proof of vaccination is required
• co-hosts of the view scheduled to interview VP Kamala Harris unexpectedly test positive and exit stage left mid-show before interviewing Harris -- google the story, September 24, 2021

Fox News:

• loses credibility with the "Sleepy Joe" meme (as does Powerline lose its credibility with perpetuating (?) that meme):
• the average viewer is not seeing that
• good, bad, indifferent, Biden had a remarkable press conference this a.m.
• sense of humor; bright-eyed and bushy-tailed; spoke clearly and coherently; spoke like a statesman; took questions; walked off in dignified style;
  
• those with an agenda (at either end of the spectrum) will spin the story, but the "sleepy Joe" meme is not working

Sports:

• by the way, I completely missed this
• Ryder Cup in play?
• wow: I saw the ads; I thought the Ryder cup was weeks away based on the commercials
• I find match play (or whatever it's called) incredibly boring and hard to understand. Shirley, they could find much better formats. And, please, quit calling me Shirley 
  

The numbers:

• Dow: minor movements above, below yesterday's closing
• WTI: up 40 cents, up 0.55%; trading at $73.70
• DXY: WTI up, so DXY must have been down; in fact, DXY is down slightly, to 93.36
• TNT: a pretty noticeable jump from the 1.30% range; now yielding, 1.454%;
• of note:
  
• DVN: up 0.67%; up about twenty cents; trading at $33; one year ago, trading at $8
• NIKE: Jim Cramer not buying the "SOLELY" due to supply chain problems; down 7% this morning; down $11/share; trading at $149
• AAPL: not surprising -- profit taking; down 0.4%; this $145-stock is trading at $146;
• leader board included: PDX, MRK
• SRE: this $124-stock is trading at $129
• ARKK: this $120-stock is trading at $117; down almost 2%; down over $2; obviously related to China banning cryptocurrency trading/transactions
• OKE: flat; down two cents; trading at $57.44; apparently it hit an intra-day high at $57.74 already, earlier this morning

Question:

• with the most job openings ever in the history of the United States ...
• with eleven million job openings ...
• how can we have a "headline" unemployment rate of 5.1%?
• something suggests definitions and/or requirements for unemployment status need to be changed 
• it looks like somewhere between 4% and $8% unemployment is "full employment" in a country like the US with such a huge safety net; Euopre / UK with an even larger safety net (health care), one could argue 6% to 12% unemployment would indicated full employment.
  

Investing:

• finally
• I am way overweighted in energy -- it's been that way for decades -- not dollar amount but "share amount" if that makes sense
• I am way underweighted in technology -- I am working as hard as I can to change that
• but finally, a loss in my technology portfolio no longer drags down the entire portfolio; that overweight in energy really helps; LOL

What's a WAAC? Weighted average cost of capital. Link here. 

• If the ROIC is greater than the WACC, then value is being created as the firm invests in profitable projects. Conversely, if the ROIC is lower than the WACC, then value is being destroyed as the firm earns a return on its projects that is lower than the cost of funding the projects. Link here.
• Karen Finerman brought this up on CNBC yesterday. 

October, 2021 - Hearing Dockets

The usual disclaimer pertains. This is done quickly; there will be typographical and content errors. Shorthand notes necessarily are incomplete. If this information is important to you, go to the source. 

Link here.

Wednesday
October 20, 2021
Seven pages

Remember, these are cases, not permits.

• 28985, NDIC, Reunion Bay-Bakken, consider appropriate spacing for wells completed in a 2560-acre unit, sections 28/29/32/33-152-93, McKenzie, Mountrail
• 28986, MRO, Bailey-Bakken reduce setback, Dunn County
• 28987, Hess, Ross-Bakken, establish a standup 1920-acre unit; sections 12/13/24-156-92, five wells, Mountrail County
• 28988, Hess, Tioga-Bakken, establish an overlapping 2560-acre unit, sections 23/24/25/26-158-95; one well; Williams County
• 28989, Slawson, Big Bend-Bakken, i) establish two overlapping 640-acre units; S/2 of sections 14/15, and the N/2 of sections 17/18-152-92; four wells; ii) establish an overlapping 960-acre unit, S/2 of sections 16/17/18-152-92, four wells; terminate an existing 1290-acre unit and an existing 1600-acre unit; Mountrail County
• 28990, Slawson, Big Bend-Bakken, i) establish two overlapping 1920-acre units; two wells; ii) terminate an existing 3840-acre unit; in Zone L, Mountrail County;
• 28991, Slawson, Big Bend-Bakken, i) four wells on an existing 640-acre unit, section 22-152-91; ii) establish an overlapping 1280-acre unit, sections 27/28-152-91, two wells; iii) establish two overlapping 2560-acre units; one well; iv) terminate an existing 2560-acre unit, Zone XLIII, and a 3840-acre unit, Zone XLVIII, Mountrail County
• 28992, MRO, Antelope-Sanish, pooling,
• 28993, MRO, Reunion Bay, pooling,
• 28994, MRO, Reunin Bay, pooling,
• 28995, MRO, Reunion Bay, pooling,
• 28996, MRO, Lost Bridge, pooling,
• 28997, MRO, commingling,
• 28998, MRO, commingling,
• 28999, Hess, Tioga-Bakken, pooling,
• 29000, Hess, pooling,
• 29001, Hess, pooling,
• 29002, Hess, commingling,
• 29003, Hess, commingling,
• 29004, Hess, commingling,
• 29005, Slawson, Big Bend, pooling

Thursday
October 21, 2021
Seven pages

Remember, these are cases, not permits.

• 29006, EOG, Stanley-Bakken, establish a 3200-acre unit, sections 18/19/20/29/30-155-90; four wells; Mountrail; 
• 29007, EOG, Parshall-Bakken, establish an overlapping 1920-acre unit, one well; Mountrail
• 29008, EOG,  Stanley and/or Parshall-Bakken, establish i) an overlapping 2240-acre unit, one well; ii) an overlapping 2560-acre unit, two wells; Mountrail
• 29009, NDIC, Glass Bluff-Madison, bond requirement, Liberty Resources, McKenzie, Williams
• 29010, CLR,  Pleasant Valley, Beaver Lodge, Big Butte and/or Manitou-Bakken; establish two overlapping 3840-acre unit, one well; Williams, Mountrail; 1/2/11/12/13/14-156-95; 1/12/13-156-95 and sections 6/7/18-156-94;
• 29011, Zavanna, revoking a Petro-Hunt permit 
• 29012, WPX, Squaw Creek-Bakken, establish an overlapping standup 960-acre unit, E/2 of sections 8/17/20-149-94; four wells; McKenzie; 
• 29013, WPX, Squaw Creek-Bakken, establish an overlapping standup 960-acre unit, W/2 of sections 8/17 and 20-149-94; four wells; McKenzie 
• 29014, WPX, Squaw Creek-Bakken, establish an overlapping standup 1920-acre unit; one well; McKenzie; 
• 29015, WPX, Squaw Creek-Bakken, establish an overlapping standup 1920-acre unit, one well; McKenzie
• 29016, PetroShale, Croff-Bakken, exception for siting location
• 29017, CLR, pooling,
• 29018, CLR, pooling, 
• 29019, CLR, Pleasant Valley-Bakken; eight wells on an existing 1920-acre unit; Williams County 
• 29020, CLR, Cedar Coulee-Bakken; thirteen wells on an existing 1280-acre unit, section 33-147-96 and section 4-146-96; Dunn County 
• 29021, CLR, commingling, 
• 29022, CLR, commingling,
• 29023, Hunt, commingling,
• 29024, Denbury, SWD conversion well; file # 8119;
• 29025, Denbury, SWD conversion well; file #15589;
• 29026, Denbury, SWD conversion well; file #15786;
• 29027, Denbury, SWD conversion well; file #14265;
• 29028, Denbury, SWD conversion well; file #90108;
  

Tuscaloosa Marine Shale Back In The News -- September 24, 2021

The Tuscaloosa Marine Shale play is tracked here. 

RBN Energy has update today. 

Most recently, August 5, 2021, there was a discussion regarding CLR and the TMS play. 

A reader alerted me to this wildcatter (?). New TMS activity;

Petition of State Line Exploration, LLC, requesting the Board to integrate, with alternate risk charges, all interests in 2,160.5-acre oil unit, situated in in Sections 7, 9, 10, 11, 22, 23 and 24, Township 1 North, Range 2 East, to horizontally drill the Reese 11 No. 1H Well to a depth of 12,500’ to test the Tuscaloosa Marine Shale Formation at a regular bottomhole location, with authority to drill multiple horizontal wellbores.  Alternately, Petitioner requests the Board to integrate all interests in said unit without alternate risk chares.

Information suggest the approximate vertical depth will be 12,500 feet with an estimated measured depth of 19,000 feet. Very similar to Bakken depths. A 2,160.5 acre drilling unit would be a four-section line unit (overlapping unit) in the Bakken.

Cost: again, around the same costs as Bakken wells early in the Bakken boom, less than $10 million but more than $7 million.

I may have my geography wrong, but the original (recent) note on the TMS was centered on tracts west of Baton Rouge and directly east of the Texas - Louisiana state line. 

On the other hand, this newest wrinkle, the Reese 11-1H is near Amite City, Tangipahoa Parish, is well northeast of Baton Rouge and northwest of New Orleans. 

By the way, on another note, the name of this LLC is interesting: "State Line Exploration, LLC." Obviously the "state line" is the Texas - Louisiana state line.

If nothing else, I'm starting to learn the geography and parishes of Louisiana. 

No Wells Coming Off Confidential List -- Update On The Tuscaloosa Marine Shale -- September 24, 2021

China: the electricity shortages in China are worsening ... it's getting so bad, Beijing is now asking some food processors (like soybean crushing plants) to shut down. Link here. 

Jargon: I heard this phrase for the first time the other day on CNBC from one of my favorite analysts: "ROIC greater than WACC." Need to explore. I know nothing about WACC. Link here. "Burggraben" was also new to me. German for "moat."

No surprise: China's central bank bans cryptocurrency. Bitcoin slumps. Link here. 

Apple, Inc: I updated my thoughts on Apple (very, very positive) last night but put the post in draft thinking I was too far ahead of my headlights. Today, it's being reported that my observations were spot on. Now, we have a new rating: a "strong buy" recommendation with a new price of $198, up 35% from current levels. Why don't we just all it $200? Because $198 sounds so much more "real." Link here. 

Unhelpful: another WSJ article on the bottleneck at California ports but no explanation why. Link here.

Covid-19: Alberta -- the oil province -- has by far the highest Covid-19 case numbers among Canadian provinces, and one of the lowest vaccination rates. But apparently holding Covid parties to enhance natural immunity. Link here.

Baker Hughes: warns on energy transition. Link to Irina Slav.  

*******************************
Back to the Bakken

Active rigs: no longer being reported by NDIC. Best estimate: 26*.

$73.28	9/24/2021	09/24/2020	09/24/2019	09/24/2018	09/24/2017
Active Rigs	26*	11	57	64	57

No wells coming off confidential list according to NDIC.

RBN Energy: can higher crude oil prices revive the Tuscaloosa Marine Shale play? Archived.

A long, long time ago — or, more precisely, in the spring of 2014, when WTI was selling for more than $110/bbl — a handful of exploration and production companies were convinced they were onto something big in southwestern Mississippi and east-central Louisiana. 

There, they believed, the Tuscaloosa Marine Shale (TMS) was poised to become the next Bakken, the U.S.’s premier shale play at the time, but even better for producers seeking more robust crude prices because of TMS’s very low gas-to-oil ratio — an oil cut north of 92%! –– and proximity to Gulf Coast refineries. 

While there had been a host of failed efforts by producers to wring out large volumes of premium-priced Louisiana Light Sweet (LLS) oil from the marine shale’s sedimentary silts and clays, the E&Ps felt in their bones that they were finally “cracking the code.” Then, at just the wrong time, came an oil price crash that set the whole industry back on its heels and activity in the TMS quickly slowed to a crawl. As we discuss in today’s RBN blog, an even smaller cadre of Tuscaloosa Marine Shale true believers is now banking on a production revival in the core of the play.