Thursday, November 22, 2012

Essays on Natural Gas Production in America

Note: scroll down to the next post to see the wells coming off the confidential list on Friday.

Updates

November 23, 2012: another Rigzone essay that might offset some of the concerns in the original post. Bottom line: the low price of natural gas will favor the long-term operators in the Marcellus. Note the designation of the new play: Marcellus 2.0. Sort of like Keystone XL 2.0.

Later, 00:31 am: be sure to read first comment in concert with the post.

Original Post

Recently there have been some articles suggesting the relative glut of natural gas in the United States (due to unconventional shale, fracking) may be an "illusion" of sorts. It was my impression that these articles were being published in blogs and news sources that had agendas that might bias the reports/studies.

However, there is now a very interesting essay at Rigzone.com. I consider the Rigzone about as unbiased as any oil and gas "publication" out there. If that is an accurate assessment of Rigzone, then the essay posted there today about the "illusion" of a relative glut of natural gas for the long term needs to be taken seriously.

I believe a similar article was posted at The Oil Drum.com within the recent past; I don't recall if I posted a link to that story or not.

It appears there are very smart people on both sides of this argument. It will be an interesting story to follow. It certainly will support those in Congress who are already arguing against exporting American natural gas. And it doesn't look like it will take a long time for more data to be generated to suggest which side might be correct -- perhaps as soon as another four or five years.

For investors, it sounds like the oil service companies will have more work, not less work, going forward, completing natural gas wells. And, of course, if the analysis at the linked essay is accurate, it is only more good news for North Dakota.

At the linked article:
The significance of this analysis is that 56 percent of current Texas natural gas production comes from wells drilled in the last 30 months. Fully 75 percent of total gas output comes from wells drilled in the last 54 months, and less than 20 percent comes from wells drilled before 2008. Increasingly, we are relying on gas output from new wells as older wells have declined to such low volumes that collectively they are becoming marginal contributors. [By the way, the same thing is being said about the Bakken, but others disagree. ]
The significance of Mr. Berman's recent Texas gas production analysis, which he has supported with a similar analysis of the production performance of Barnett shale wells, is that it confirms observations he made two and a half years ago in a presentation. Not only does it confirm those projections, but the data shows the current situation to be worse than projected. We suspect what has made the current situation worse is that producers have embraced using more hydraulic fracture stages per well, which drains reserves faster leading to sharply lower future production volumes.
*******************

I quit watching the Dallas - Redskins game some time in the third / fourth quarter earlier this afternoon. I forget exactly when, but the score was so lopsided, it was clear what the outcome would be. The final score suggested the game was a lot closer than it really was. Tony Romo has never impressed me, though for short periods, off and on, during the past two years, I thought he was "okay" and might become a "Dallas quarterback." But this year ... he has not been impressive. The Cowboys are 5 - 6 and near the bottom in the standings. It looks like there are only five NFC teams that have a lower percentage season so far this season.  Obviously the owner still has "faith" in Romo, but it would not surprise me a bit if there is talk about "the quarterback problem at Dallas" in the sports columns in the next few weeks if things don't turn around. So, we'll see. [Later: I see there's already an article suggesting Jerry Jones is already questioning whether the team can even get to 8 - 8 this season, but the onus is on the coach, not the quarterback, according to this article.]

The following game, the New England Patriots at New York Jets was a much more interesting game -- for the Patriot fans. Even one of the announcers noted that they had probably lost their audience by the middle of the third period.

Wells Coming Off Confidential List on Friday (Day After Tomorrow's Thanksgiving Day)

Wells that came off the confidential list on Thanksgiving:
  • 20855, 529, Slawson, Fox 2-28H, Van Hook; t9/12; cum 9K 9/12;
  • 21580, 1,063, Sinclair, Ersa Federal 1-4H, Bully, t8/12; cum 22K 9/12;
  • 22493, 1,319, Newfield, Bernice 150-99-20-17-2H, South Tobacco Garden, 14K first full month; t9/12; cum 16K 9/12;
  • 22722, conf, Triangle USA/QEP, Erickson 155-102-26-26-36H/Lynn 2-23-14H-155-102, Squires,
Wells coming off the confidential list on Friday:
  • 16906, 61, Denbury Onshore, TRMU 22X-16H, T.R.; I believe this was an earlier Encore permit that was canceled; and now it appears that Denbury decided to go after it (I could be mistaken); a Madison welll; completed 8/12; t9/12; cum 2K 9/12;
  • 20333, drl, EOG, West Clark 2-2425H, Clarks Creek,
  • 20976, 583, CLR, Ralph 1-22H, Long Creek, t9/12; cum 2K 9/12;
  • 22354, 741, EOG, Ross 36-1707H, Alger; t6/12; cum 53K i/12;
  • 22418, drl, Hess, BW-Spring Creek 149-99-1201H-1, wildcat, central McKenzie County; between Pembroke and Cherry Creek oil fields; about 5 miles south of Watford City;
  • 22586, 2,819, BEXP, Bratcher 10-3 4H, Ragged Butte; t10/12; cum --
  • 22673, 1,048, Hess, EN-Rice-155-94-0211H-3, Manitou, t10/12; 1K 9/12;
  • 22711, drl, BEXP, Alger State 16-21 3H, Alger,
There's a 6-well pad about two miles southeast of the Hess-EN-Rice well in Manitou field:
  • 19983, running north, 845, Hess, EN-Ruland A-155-94-1201H-1, Manitou, s1/11; t8/11; F; cum 111K 9/12; 38 stages; 1.7 million lbs total; 831K ceramics; Three Forks
  • 19985, running south, 1,073, Hess, EN-Dobrovolny A-155-94-1324H-1, Manitou, s1/11; t7/11; AL; cum 123K 9/12; frack report to be submitted later; geologic markers to be submitted later
  • 19987, running north, 1,521, Hess, EN-Ruland A-155-94-1201H-2, Manitou, s1/11; t9/11; AL; cum 134K 9/12; frack report to be submitted later; geologic markers to be submitted later
  • 19988, running south, 743, EN-Dobrovolny A-155-94-324H-2, Manitou, s1/11; t10/11; AL; cum 80K 9/12, middle Bakken; frack data to be reported later;
  • 19989, running north, 828, EN-Ruland A-155-94-1201H-3, Manitou, t3/12; cum 65K 9/12;
  • 19990, running south, 697, EN-Dobrovolny A-155-94-1324H-3, Manitou, s1/11; t12/11; AL; cum 63K 9/12; Three Forks; frack data to be reported later; 
It will be interesting to see the IP of the BEXP Alger State well; Alger field is a very, very good field. I think it was the first oil field in the Bakken that I highlighted; if not the first, one of the early ones. This is an extremely active and an extremely good field. Just two miles south of #22711, is a section with eight horizontals, all running south (sections 27/34). These wells are about 8 miles southwest of Stanley.

The Americans, One Canadian's Opinion -- Tex Ritter

The YouTube music video with Tex Ritter singing "The Americans, One Canadian's Opinion" was removed by YouTube due to multiple complaints of copyright infringement.

That video has been at the bottom of the blog almost ever since the blog began. It is quite sad to see it removed. (No doubt it will show up again.)

I was able to find a copy on a Korea website but not able to embed it (yet) so it will be linked at the sidebar at the right, under "My Favorite Commentaries.'

I'm not sure what will be the long-term replacement. I can think of a number of possible replacements. For now I will go with a Connie Francis classic.

For those interested, this is not as good as Tex Ritter's version, but it is the original:
One Canadian's Opinion, Gordon Sinclair

The 29-Hour Week

Update

January 9, 2013: Wendy is joining others with a 29-hour workweek to avoid ObamaCare.

WOWT-TV reports that nearly 300 employees at 11 Wendy’s locations in the Omaha area will have their hours reduced to 28 hours a week because the franchise owner says he can’t afford to pay his employees health care.
November 23, 2012: with regard to the Wal-Mart employee walk-out on Black Friday, there was one lone employee who walked out of his scheduled shift at a Wal-Mart on the south side of Chicago. He says he worked in the produce section, earning $8.95/hour, and recently had his hours cut to below 40 hours. Unfortunately for workers, I assume Wal-Mart will be looking for positions that can be cut to 29 hours so as not to incur ObamaCare expenses wherever possible. As for the Black Friday Wal-Mart walk-out, this, too, shall pass.

Original Post

Headline: Pennsylvania College Slashes Instructors' Hours to Avoid Obamacare
Pennsylvania's Community College of Allegheny County (CCAC) is slashing the hours of 400 adjunct instructors, support staff, and part-time instructors to dodge paying for Obamacare. 
"It's kind of a double whammy for us because we are facing a legal requirement [under the new law] to get health care and if the college is reducing our hours, we don't have the money to pay for it," said adjunct biology professor Adam Davis.
On Tuesday, CCAC employees were notified that Obamacare defines full-time employees as those working 30 hours or more per week and that on Dec. 31 temporary part-time employees will be cut back to 25 hours. The move will save an estimated $6 million
Million Dollar Way has blogged about this unintended consequence for some time. This was posted back in early October, 2012:
A referendum on ObamaCare and liberty. "Without an immediate course change, the health-care law will become irreversible." It's already irreversible. There are too many good things about it. Including the 29-hour workweek. If the 29-hour workweek is "legalized," folks can start earning overtime pay at 30 hours. What a great country. Even better than the French 35-hour workweek.
Obamacare defines full-time employees as those working 30 hours or more per week. Wow, this is absolutely nuts. The IRS will police the program; if folks don't purchase health care insurance, they will incur a tax penalty. And whether one is a highly paid, full-time employee, or a minimum wage, part-time employee, one will be required to obtain health care insurance. At least that's how I understand it. And companies are looking for ways to move full-time employees to part-time employee status to avoid the cost. 

A few days ago, an owner of several Denny's restaurants took some heat for doing this. Folks suggested the reason for ObamaCare was because of folks like him (owners of restaurants). I guess they can start adding university presidents.

Idle Rambling: File Under -- "Why I Love To Blog"

One of the nice things about "blogger" and an application, one can check out the links that folks take when exiting the Million Dollar Way. It is amazing how many links I have forgotten about. And it's too bad (that I have forgotten them). Some of the links are absolutely incredible.

Take "veederranch" / "Meanwhile Back At The Ranch" for just one example. I had forgotten all about this one. Truly a lot of fun. I don't recall how I was alerted to it, but when I go through it again, it's a keeper, I'm glad I stumbled upon it. Wow, just go to the site, and scroll down, look at the beautiful pictures, and occasionally stop long enough to read the notes. The love comes through.

I won't forget about the site from now on. I've plugged my e-mail address into the subscription widget.

Happy Thanksgiving! Enjoy a Travelogue Site at The Link

Wow, Hess is really advertising their "toys" for Christmas. Hess has a float in the Macy's Day Parade this year featuring the pop group "The Wanted" and their Hess rescue helicopter. I just blogged about that yesterday.  Sometimes I find the MDW absolutely amazing. Smile.

Overlooked in all the posting these past few days: it looks like both the Three Forks and the middle Bakken will be nice formations in and around Willison, the heart of the Bakken. BEXP has some nice wells in both formations in the Todd field. The west (and growing) side of Williston is in the Todd oilfield.

How fast can they reach total depth in the Bakken? This is not a record, but it was fast. I believe the record is eight (8) days but that was to the middle Bakken. This well targeted a deeper formation, the Three Forks. Twelve (12) days from spud to total depth, long (two-section) horizontal;
23510, A, Whiting, Brueni 11-28PH, Green River, t10/12; said to be flowing; no IP provided; spudded August 25, 2012; total depth of 20,000 feet on September 6, 2012 (12 days); Three Forks; 
For newbies, a reminder that I update many of the earlier posts that are archived at links on the right sidebar. A particularly interesting link is the one to "Enquiring Minds" where discussions of topical interests regarding the Bakken occur.  For newbies (and even those very familiar with the Bakken) can learn a lot about the Bakken at that discussion group.

At the stand-alone post regarding the Decker coal mine there is quite a bit of information about challenges the "railroad" faces when ramping up in the Bakken. The stand-alone post starts the conversation, and it continues in two long comments. It's an interesting story. As I've mentioned several times on the blog, I am always surprised where some stories take me.

None of the links below are about the Bakken; if you are at this site solely for the Bakken, do not go to any of the links below.

Details are sketchy but there are suggestions that the turkey pardoned by President Obama last year is someone's Thanksgiving dinner today. Some folks certainly get defensive. When asked about details surrounding the POTUS-pardoned turkey and the current whereabouts of the carcass, the spokesman said he did not know, "he was in marketing." We  know slightly more about what happened to Osama bin Laden's carcass after his demise.

By the way, you might all enjoy this unique website -- a travelogue website, I believe. At least "Route 66" suggests that it is. Much of the site is free, but there are some pay-per-view downloads.

Speaking of NASCAR, Danica Patrick didn't do so badly: a million dollars in NASCAR winnings with ten starts. Compare to others. I was surprised.  With her endorsements, she probably does as well as anyone on the circuit.

No photos of the heroes? They were all asleep.

Our next Secretary of State?

Wow!

This may become the 2013 theme song for the Million Dollar Way.