Wednesday, December 12, 2018

The Market, Energy, And Political Page, T+37 -- December 12, 2018

France: this is the question troubling me today. Did President Macron say:
  • qu'ils mangent le g√Ęteau; or,
  • qu’ils mangent de la brioche?
Regardless, this was Pelosi's response: miettes de pain. Pronunciation here.

The wall: political theater. The president wants $5 billion. Congress will give him $1.6 billion. He's willing to veto any new spending bills unless he gets the $5 billion.

Migrants: just blew their story. Claiming "political asylum" they caravan migrants now say they will leave the caravan and return to their home countries if they each get $50,000 from the US. They will use the $50,000, they say, to start their own businesses in their home country. They say that's a small amount considering all the money US citizens stole from Honduras. No link. Story easily found.

Apple phone sales in trouble. I don't think I've ever seen this before. Going into Christmas season Apple has slashed prices. I think these are the $1,000-phones. They are now being advertised for $499 on the Apple site.


Wayfair. Apparently this is a big story in Boston. Wayfair is a huge e-commerce company headquartered in Boston. The company is getting yet another tax break from the state for agreeing to increase the number of jobs in the state. Meanwhile, over at social media sites, I continue to see the trope that the shale industry is going broke, that it cannot make money on $50-oil. In fact, many (most?) shale operators are doing just fine. Some went away, some reorganized after the Saudi Surge (2014 - 2016) but are now better prepared for the current turbulence. Many are paying dividends. Wayfair: in business since 2002, and has not yet turned a profit.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.

Three Wells Coming Off Confidential List Today; One Will Be A DUC -- December 12, 2018

Hess: first to offer oil and gas apprenticeships in North Dakota

ISO New England: link here. Right on schedule --
  • demand surge
  • natural gas kicks in
  • renewables unchanged
  • request for Canadian hydro
  • spot price spikes to $150/MWh
  • to hold down costs, coal plants fired up
  • coal well over 4%: 7% right now; 8% peak yesterday
Oil tankers find solace in shale -- Bloomberg.

Maiden LNG cargo leaves Corpus Christi -- Rigzone. See this link for background, interactive map.

ADNOC claims first.
Calling the move unprecedented, Abu Dhabi National Oil Co. reported Tuesday that it has safely completed the first co-loading of liquefied petroleum gas and propylene onto the same vessel. The products are typically shipped separately.
According to ADNOC, successfully loading approximately 12,600 metric tons of propylene and 33,000 metric tons of LPG onto a single vessel – docked in Ruwais,
Peak oil? Hardly. EIA says US domestic oil production rising despite low prices.

New refinery? Alberta may build one

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

Note: yesterday it was noted that MRO extended its core position in the Bakken. This announcement was made in the face of tanking WTI prices, trading at about $50 when the announcement was made. Speaks volumes.

Wells coming off the confidential list today -- Wednesday, December 12, 2018:
34115, conf, Lime Rock Resources, Neal 2-33-28H-144-95, Murphy Creek, producing, 
34114, conf, Lime Rock Resources, Twist 2-4-9H-143-95, Murphy Creek, producing,
33893, conf, Hess, SC-5WX-152-99-0310H-4, Banks, no production data, 


Active rigs:

$52.6012/12/201812/12/201712/12/201612/12/201512/12/2014
Active Rigs65514165181

RBN Energy: IMO 2020 and the need for increased global oil refinery runs.
The IMO 2020 rule, which calls for a global shift to low-sulfur marine fuel on January 1, 2020, is likely to require a ramp-up in global refinery runs — that is, refineries not already running flat out will have to step up their game. Why? Because, according to a new analysis, the shipping sector’s need for an incremental 2 MMb/d of 0.5%-sulfur bunker less than 13 months from now cannot be met solely by a combination of fuel-oil blending, crude-slate changes and refinery upgrades. The catch is, most U.S. refineries are already operating at or near 100% of their capacity, so the bulk of the refinery-run increases will need to happen elsewhere. Today, we continue our look into how sharply rising demand for IMO 2020-compliant marine fuel may affect refinery utilization.

This is the third blog in this series, and the latest of the many blogs about the ongoing effort by the International Maritime Organization (IMO) — a specialized agency of the United Nations — to ratchet down allowable sulfur-oxide emissions from the engines that power the 50,000-plus tankers, dry bulkers, container ships and other commercial vessels plying international waters.

The current 3.5% cap on sulfur content in bunker (marine fuel) in most of the world is set to be reduced to a much stiffer 0.5% on January 1, 2020. [There is an even tougher 0.1%-sulfur limit already in place in the IMO’s Emission Control Areas (ECAs), which include Europe’s Baltic and North seas and areas within 200 nautical miles of the U.S. and Canadian coasts.] There are three primary options shipowners have to achieve compliance with IMO 2020: (1) continue burning high-sulfur bunker (HSB; sulfur content up to 3.5%) and install an exhaust gas cleaning system (scrubber) to eliminate most of the sulfur dioxide emissions; (2) switch to marine distillates or low-sulfur bunker blends whose sulfur content is 0.5% or less; or (3) use alternative low-sulfur fuels like liquefied natural gas (LNG) or methanol.

Tuesday, December 11, 2018

Random Update Of An Old CLR Dvirnak Well -- December 11, 2018

The well:
  • 20806, 744, CLR, Dvirnak 2-7H, API: 33-025-01369, Jim Creek, t12/11; cum 301K 10/18; available data suggests this well has not been re-fracked.
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20183110469104291210311342109280
BAKKEN9-20182520880204101892322191218600
BAKKEN8-20184238823373724164101600
BAKKEN7-20180000000
BAKKEN6-20180000000
BAKKEN5-20180000000
BAKKEN4-20180000000
BAKKEN3-2018232367404
BAKKEN2-201824109614045061321130615
BAKKEN1-20183116731612527218321830
BAKKEN12-201731166016174712085206916
BAKKEN11-20173016501428454204020400
BAKKEN10-20173117302014489217021700

The Dvirnak wells are tracked here.

The CLR Dvirnak Wells In Jim Creek Oil Field Are Being Completed -- December 11, 2018

This page will not be updated.

The Dvirnak wells are being fracked; some are completed. The Dvirnak wells are tracked here.

Note the production profile of one of the Dvirnak wells:
  • 32749, 2,358, CLR, Dvirnak 8-7H, 47 stages; 12.5 million lbs, Jim Creek, t10/18; cum 72K 10/18;
Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20183162410622447163078652715277125
BAKKEN9-20184775176377373826558932372
BAKKEN8-20180000000
BAKKEN7-20180000000
BAKKEN6-20185134013409870179901799
BAKKEN5-20181001468000

MRO Extends Core Position In The Bakken -- December 11, 2018

Updates

December 12, 2018: one thing overlooked in the note below. This announcement was made in the face of tanking WTI prices, trading at about $50 when the announcement was made. Speaks volumes.

Original Post 

I had alluded to this earlier, in an earlier post; a reader provided link to information released today. 

Background:
A reader sent me a link to this press release: Marathon reports successful Bakken core extension test in Ajax area.
HOUSTON, Dec. 11, 2018 /PRNewswire/ -- Marathon Oil Corporation today announced encouraging early production results at an important four-well Middle Bakken pad in the Company's Ajax area of the Williston Basin in Dunn County, North Dakota.
The four-well pad achieved an estimated average 30-day initial production (IP) rate of over 2,400 barrels of oil equivalent per day (boed) (84% oil).
The Company also announced it has repurchased approximately $150 million of additional common stock subsequent to the date of its third quarter 2018 earnings release. Year-to-date share repurchases now total approximately $650 million, leaving $850 million of buyback authorization outstanding.

Number Of North Dakota Active Rigs Up One -- December 11, 2018; Petro-Hunt With Huge 900K Well (Seven Years Old)

US crude oil weekly inventory numbers, API data: oilprice. I think this is the biggest draw I've ever seen in one week. It will be interesting to see what the EIA has to say tomorrow. Last week, the API reported a build of over 5 million barrels. A day later, the EIA had a completely contradictory report showing a 7.3-million-barrel draw. Today, from the API:
  • an inventory draw of 10.18 million bbls
  • forecast: a draw of 2.990 million bbls

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

Active wells:

$51.9712/11/201812/11/201712/11/201612/11/201512/11/2014
Active Rigs65524065186

Five new permits:
  • Operators: Kraken Operating (4); Sinclair
  • Fields: Sanish (Mountrail); Robinson Lake (Mountrail)
  • Comments: Kraken has permits for a 4-well pad in 24-154-93; Sinclair's State well will be in section 36-154-93;
One producing well (DUC) reported as completed:
  • 33905, 1,219, Petro-Hunt, USA 153-95-9A-4-1HS, Charlson, t10/18; cum 12K over 11 days which extrapolates to 33K over 30 days;
    • neighboring wells: #32529 (SI/NC), #32530 (SI/NC), #32531 (SI/NC), #32532 (conf), and, #32533 (conf).
    • far to the east in this section: 
    • 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, t11/11; cum 900K 10/18, recent production:
      PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
      BAKKEN10-20181232613644743708758111197
      BAKKEN9-20183092779448198516977142652503
      BAKKEN8-2018319216904021161796017618126
      BAKKEN7-201831972498732209178901759579
      BAKKEN6-201830106501110228551646116076176
      BAKKEN5-20183111129105732472170021670482
      BAKKEN4-201830111911139025491651415353952
      BAKKEN3-2018311171011530243316543163270
      BAKKEN2-201828111341123024701623115528508
      BAKKEN1-2018311272412821290218163179470
      BAKKEN12-20173113263129402992176331734374
      BAKKEN11-201730131171345431081676982098351
      BAKKEN10-2017311443914496328219217019001
      BAKKEN9-2017301267412004368216658016477
      BAKKEN8-20174501690858618390
      BAKKEN7-20173151755311460810878920
      BAKKEN6-2017305032503240573026873220
      BAKKEN5-20173150544857418896227176029
      BAKKEN4-201730533756095278791852260
      BAKKEN3-20173157065469480897287560
      BAKKEN2-20172853435422447830381080
      BAKKEN1-20173166186749572932191050
By the way, that area is also a great area for Madison wells; most of them are now abandoned.

However, Petro-Hunt is drilling a Madison well in the area:
  • 28227, conf, Petro-Hunt, CMNU C-205X, Charlson, t--; cum --

CLR Reports Two Huge Thorvald Wells -- December 11, 2018

This page will not be updated. The CLR Thorvald wells are followed elsewhere.

Two Thorvald wells have recently come off the confidential list:
  • 29711, 1,625, CLR, Cukelly 4-7H1, Rattlesnake Point, 62 stages; 12.2 million lbs, t6/18; cum 98K 10/18; note: the sundry forms with frack data has this as a middle Bakken well; in fact, it's a Three Forks B1 well;
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN10-201831182961840633503346661608018186
    BAKKEN9-20183017846178553606326368166689339
    BAKKEN8-20183118712188643874125501201105005
    BAKKEN7-20181913291128822999818026494812834
    BAKKEN6-201826286242850750102395981632522969
  • 29710, 1,985, CLR, Thorvald 3-6H, Rattlesnake Point, 64 stages; 12 million lbs, t9/18; cum 40K 10/18; note: the sundry forms with frack data has this as a Three Forks B1 well; in fact, it's a middle Bakken well;
    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN10-20181713647137282105420815660014215
    BAKKEN9-20181824898246763073841500106340437
    BAKKEN8-20180000000
    BAKKEN7-20180000000

The Hess AN-Dinwoodie Wells In Antelope Oil Field

Updates

December 10, 2018: the Dinwoodie wells will now be tracked here. Production data has been updated. There is a rig on site and I assume the rest of the Dinwoodie wells are being fracked.


Original Post (from December 29, 2016)

Proposed location for a 5-well Hess AN-Dinwoodie pad:



*************************************
The AN-Dinwoodie Wells

The first one:
  • 19887, 714, Hess, AN-Dinwoodie-153-94-2833H1, Antelope, Sanish pool, t7/11; cum 208K 10/16; from the file report, the geologist's notes: the Antelope field covers more than 76 square miles and produces from seven pools: Devonian, Madison, Red River, Sanish, Silurian, Stonewall, and Winnipeg/Deadwood. Sanish pool cumulative production totals from December 1953 through January 2011 is: 13,628,037 BO; 1,324,964 BW; and, 13,049,445 MCFG. Peak oil production occurred in 1966 with a maximum of 34 wells producing from the Sanish Pool during 1967 and 1968. Seventeen wells are currently producing from the Sanish pool in Antelope field.
The Devonian Three Forks formation and target zone: 11,262' MD (10,866' TVD). The top of the ideal preferred target zone is approximately 16' TST beneath the top of the Three Forks formation.

The target zone ... informally named "D" and "E" intervals...the lateral was drilled 100% within the upper portion of the Three Forks formation, wiht greater than 70% of the well bore to be completed within the ideal preferred target porosity. Drilled from re-entry to TD in 23.7 days; drilling along the the lateral was efficiently executed in two runs.
Then:
  • 33238, conf, Hess, AN-Dinwoodie-153-94-2833H-8, API: 33-053-07890, Antelope, no production data,
  • 33237, conf, Hess, AN-Dinwoodie-153-94-2833H-7, API: 33-053-07889, Antelope, no production data,
  • 33236, rig on site (10/18), Hess, AN-Dinwoodie-153-94-2833H-6, API: 33-053-07888, Antelope, no production data,
  • 33235, conf, Hess, AN-Dinwoodie-153-94-2833H-5, API: 33-053-07887, Antelope, no production data,
  • 33234, conf, Hess, AN-Dinwoodie-153-94-2833H-4, Antelope, API: 33-053-07886, no production data,
  • 32860, 2,708, Hess, AN-Dinwoodie-153-94-2833H-2, Antelope-Sanish, t10/17; cum 157K 10/18;
  • 32861, 2,202, Hess, AN-Dinwoodie-153-94-2833H-3, Antelope-Sanish, t10/17; cum 196K 10/18;
  • 32862, 1,952, Hess, AN-Dinwoodie-LE-153-94-2833H-8, Antelope-Sanish, t10/17; cum 200K 10/18;
  • 19887, 714, Hess, AN-Dinwoodie-153-94-2833H-1, Antelope-Sanish, t7/11; cum 247K 10/18; no bump in production;

The Market, Energy, And Political Page, Part 2, T+36 -- December 11, 2018 -- Shale Story Staggering

Wow, this is quite a story, from Bloomberg: US shale becomes oil industry's safe haven. I haven't read the article yet. Let's read it together. I'm curious if Bloomberg uses the new "catch phrase" for US shale: "short-cycle projects." Perhaps coined by Chevron?

From the linked article:
Big Oil is investing more in U.S. shale, not less, after the recent tumble in crude prices.
It’s a far cry from four years ago when OPEC declared war on American shale areas, which at the time had some of the highest costs anywhere in the world and were often the first on the chopping block during tough times.
The cost of shale production has fallen so much since then that it’s becoming a safe haven for major oil companies in times of volatile prices, providing rapid, reliable growth and quick returns even with crude trading for just over $50 a barrel, down by almost a third since the start of October.
The U.S. shale sector has helped boost American production to an average of 10.9 million barrels a day this year, the most on record. Output is forecast to grow a further 11 percent next year, according the Energy Information Administration.
ConocoPhillips said Monday it’s spending half its 2019 budget in the continental U.S., while Chevron Corp. is investing more at home than it’s done for more than a decade, with $3.6 billion going to the Permian Basin alone. Anadarko Petroleum Corp. and Hess Corp., both global operators, plan to increase spending on their American assets more than 40 percent.
So, far, "short-cycle' has not been used.

From Conoco's CEO:
Production growth “slows down at $50 but I don’t think it stops at $50, and it certainly continues if prices get back to $60,” Lance said. Skeptics thought shale “wouldn’t last long, but it’s here, it’s a huge resource and it’s going to be resilient and long lasting.”
Conoco alone will increase its shale production 25 percent next year, Lance said. That’s on top of growth of about 35 percent expected this year. The shale revolution is having a bigger impact on energy markets than the development of offshore production in the 1960s, he said.
Short-cycle? From Bloomberg, previously posted:
[Chevron's] Chief Executive Officer Mike Wirth’s decision to raise spending while oil is in free fall shows how the industry has become more comfortable operating at lower prices after cutting costs and shunning complex projects in recent years. But in March he pledged to keep annual budgets at no more than $20 billion for the next three years, about half the amount earmarked for 2014 when the company was overspending on gas projects in Australia.
“Our investments are anchored in high-return, short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years,” Wirth said in the statement.

Mike Filloon On The Permian -- December 11, 2018

Mike Filloon as a good article over at SeekingAlpha. He is exactly correct: the Permian bottleneck will continue as huge well results continue. Archived.

I don't follow the Permian very closely. But based on what the Bakken is doing, the Permian is going to blow folks away.

First of all, this pipeline problem. It's temporary. Free market capitalism will solve this problem sooner than later. I think there was even a post along that line not too long ago.

But based on the Bakken the Permian is going to surprise a lot of folks. The wells in the Bakken keep getting better and better; costs coming down; and, in fact, in the Bakken, less proppant than expected is being used, especially in the Three Forks.

Any question about the Bakken wells, just click on the "50K_Wells" tag and the "75K_Wells" tag.

I digress. From Mike Filloon and the linked article:
  • Permian production continues to drive higher in the face of wide differentials and a pull back in oil prices.
  • There are several ways to play this through E&Ps and pipelines, as the pullback in oil prices is overdone and take away capacity in on the way.
  • PAA looks like a way to play the Permian pipeline build out, as it has significant exposure to the basin.
  • CXO has 640,000 acres in the Delaware and Midland basins and continues to produce a large number of monster locations.  It provides a Permian focused operator with a large inventory of locations to complete.
  • The market has been hit hard and many of the operators stock prices have suffered, but there seems to be value in the pullback. 
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.