Wednesday, June 26, 2013

Future Looks Bright For Cline Shale

Rigzone is reporting.
The Eagle Ford shale play in South Texas has received a great deal of attention in recent years, but interest has also grown in the past two years in the Cline shale play in West Texas' Permian Basin, according to energy industry officials.
Found at a depth of about 9,000 feet and covering an area of approximately 1.6 million acres, the Cline production looks promising, though the 80 to 100 horizontal wells drilled to date are too few to draw any definite conclusions, said Alan M. Herbst, who heads New York-based energy and financial firm advisor Utilis Advisory Group LLC, in an interview with Rigzone.
"The information coming out on the Cline shale indicates up to 30 billion barrels of recoverable oil, which is substantially larger than other large plays," said Dr. M Ray Perryman, head of the Texas-based economic and financial analysis firm The Perryman Group.
The latest estimates seen for the Bakken top out at 11 (though they were recently doubled and could go higher). Eagle Ford top-end figures for recoverable oil are somewhere around 10 billion.
It's pretty much agreed that the Bakken/Three Forks is easily 24 billion bbls of recoverable oil but I won't quibble. 

So, again, for newbies:
  • Williston Basin: Bakken
  • West Gulf: Eagle Ford
  • Permian: Cline (and others)

Too Good To Pass Up

Bakken Shale guns, for sale.

The description for the Bakken shale guns linked here.

Quick Note

I am traveling from Boston to Dallas. I left Monday evening at 9:20 p.m. As I always do, I drive straight through, catnapping along the way. I stop often and long, enjoying the trip. No motels, no camping, just the driver's seat, McDonald's, and Starbucks. Smile. But,  as noted, I stop often and stop long.

It is 6:54 p.m. Wednesday night and I am in Texarkana. The sign says 194 miles to Dallas.

I would post more but there are no outlets in McDonald's and I am down to 27% battery life (which is superb considering minimal opportunity to charge on this trip. [Now down to 17% -- so shutting down.]

If I see a Starbucks between here and Dallas I will stop, recharge, and blog a bit.


I am receiving a lot of comments but will have to reply to them later. Sorry.


I am also receiving a lot of links to great articles, but they will have to wait also, sorry.


The drive has been beautiful. I would do it again, in a heartbeat.


The trip gave me a lot of time to think.  About national affairs, politics, etc. It will be fun to blog on them when I get back. Some of my opinions on some topics have changed.

Ten (10) New Permits -- The Williston Basin, North Dakota, USA; OXY USA Reports A Typical OXY USA Well; Zenergy Reports A Huge Well; MRO Has A Nice Well

OXY USA reports a new well today; see below. For newbies: OXY USA wells are tracked here 

Brent/WTI spread at 18-month low -- Oil & Gas Journal reporting:
Crude prices advanced marginally in mixed energy markets June 25 with the West Texas Intermediate-North Sea Brent spread dropping to an 18-month low of $5.94/bbl. Natural gas prices continued to fall.
“Energy traders essentially shrugged off President Barack Obama's ‘War on Carbon’ yesterday, which is not too surprising given that his speech earned lots of enthusiasm points but was a little light on impactful policy changes, carbon regulation of power plants notwithstanding,” said analysts in the Houston office of Raymond James & Associates Inc. “Instead, traders focused on US durable goods orders, which ratcheted up 3.2% in May, surpassing analyst expectations and signaling a hunky-dory domestic economy.”
Active rigs: 187 (steady)

Ten (10) new permits -- 
  • Operators: QEP (4), Newfield (3), Hess (3)
  • Fields: Grail (McKenzie), Hawkeye (McKenzie), Siverston (McKenzie)
  • Comments: these are incredibly good locations; we are seriously into the manufacturing stage for some of these companies
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Seven (7) producing wells were completed:
  • 23656, 327, XTO, Hegg 11-29SH, Siverston, t4/13; cum --
  • 22544, 56, OXY USA, Kary 2-24-13H-144-97, Cabernet, t2/13; cum --
  • 25314, 553, Whiting, Ness 42-31-2TFH, Sanish, t6/13; cum --
  • 25152, 665, Whiting, Bentsen 13-35H, Sanish, t5/13; cum --
  • 24041, 676, SM Energy, Broderson 2X-27HA, Siverston, t5/13; cum --
  • 24040, 807, SM Energy, Broderson 2-27H, Siverston, t51/3; cum --
  • 22889, 463, Hess, LK-Wing 146-97-2215H-7, Little Knife, 
Wells coming off the confidential list Thursday:
  • 20761, 2,196, Zenergy, OMLID 18-19HTF, Elidah, t4/13; cum 21K 41/3;
  • 21496, 791, Zenergy, Hanson 33-28H, Church, t5/13; cum 4K 4/13;
  • 24247, drl, BR, CCU Meriwether 14-19MBH, Corral Creek, no data
  • 24622, 1,448, MRO, Annie USA 11-29TFH, Reunion Bay, t2/13; cum 42K 4/13;

20761, see above, Zenergy, OMLID 18-19HTF, Elidah:

DateOil RunsMCF Sold

 24622, see above, MRO, Annie USA 11-29TFH, Reunion Bay:

DateOil RunsMCF Sold

Closing White House To Tours Has Resulted In An Economy In The Doldrums: GDP Revised Significanty Downward; Now Below 2%

Closing the White House to tours was a loud message to the world: the US is in deep financial trouble. It cannot even afford to provide White House tours. Was that warranted?

Reuters is reporting:
U.S. economic growth was more tepid than previously estimated in the first quarter, held back by a moderate pace of consumer spending, weak business investment and declining exports. Gross domestic product expanded at a 1.8 percent annual rate, the Commerce Department said in its final estimate on Wednesday. Output was previously reported to have risen at a 2.4 percent pace after a 0.4 percent stall speed in the fourth quarter. Economists polled by Reuters had expected first-quarter GDP growth would be left unrevised at 2.4 percent. When measured from the income side, the economy grew at a 2.5 percent rate, slower than the fourth-quarter's brisk 5.5 percent pace.
North Dakota's GDP was recently reported to be 10 - 13% in 2012. I forget the specifics. China's GDP is around 7.5.

GDP continues to fall. Does one honestly think the Fed will taper any time soon? Apparently the market doesn't think so: futures are up again, today, on the news. 

Note to the Granddaughters

I left the Boston area at 9:20, Monday night, on the trip back to Dallas. It's a 1,700 mile trip according to Google.  

Some quick observations.

It is impossible for me to describe how beautiful (and big) the United States is.

Boston to Connecticut: uneventful. We knew the area well from you time in the Boston area.

I-84 just west of New York City was a non-problem; traveling through late during the night. I thought it would be a bigger problem.

Traveling through Harrisburg during daylight reminded me of walking through the city 40 years ago almost exactly to the day.  I was on hitchhiking cross-country with three "things" happening simultaneously: a) I was going to spend the summer in Europe (which I did); b) I bookended the summer with the first love of my life who was going to school in Boston at the time; and, c) I was in the process of arranging for my own graduate school programs. The summer of 1973 was a huge, huge summer for me. And a moment of that summer was spent in Harrisburg.

I-84, south, from Pennsylvania to Knoxville carries you through some of the most beautiful scenery in the country. The weather cooperated. The interstate was in awful condition in Pennsylvania -- probably similar to the roads in the Bakken oil patch. Interestingly, the interstate kept improving the farther south I got, by in west Virginia and Tennessee in many spots it was recently re-covered.

Plenty of country western music stations to listen to.

I learned a bit more about the Bible traveling through west Virginian into Tennessee. I think the radio stations in this area are pretty much evenly divided between country music and religion.

I took the bypass around Nashville; I hit the metropolitan area at morning rush-hour and didn't want to get trapped in that traffic. I have many, many memories of Nashville, also, having spent time there in the summer of 1971 going to sales school prior to beginning my summer job in Westfield, NJ, that summer.

Going into the Nashville metropolitan area I listened to Johnny Rivers. My freshman roommate in college, Rick Nelson, idolized Johnny Rivers. Rivers subsequently become one of my favorites. One always wonder why some successful artists become super successful and others, simply, successful.

So, at the moment, I am west of Nashville.  As noted earlier: McDonald's has free wi-fi  but no outlets (that appears to be corporate policy). Starbucks has free wi-fi AND outlets. I haven't seen a Starbucks in quite some time, but the next time I do, I will stop, recharge the computer and enjoy another cup of coffee.

I am enjoying this trip so much, I may drive from Dallas to Los Angeles early next week to spend the "Fourth of July" with May and the granddaughters who are already there.

Enbridge Canadian Pipelines That Are Closed Due To Spill Having Positive Effect On WTI Price; Nice Data Points Regarding Enbridge Pipelines; Implications For Keystone XL

Bloomberg is reporting:
Enbridge Inc.’s shutdown of Alberta pipelines capable of moving 1.17 million barrels a day toward U.S. markets is shrinking output and boosting U.S. crude to the highest level against Europe’s benchmark oil since 2011.
The company’s Athabasca and Waupisoo lines, carrying oil from northern Alberta’s rapidly expanding oil-sands operations to hubs farther south, remained closed today, with the exception of a segment from Cheecham to Hardisty. Nexen Inc. and Suncor Energy Inc., facing transportation limits, cut output.

Restricted pipeline flows to the U.S., dependent on Canada for 25 percent of oil imports, are buoying U.S. benchmark West Texas Intermediate crude to the highest level against European counterpart North Sea Brent in almost 30 months. A prolonged outage would support a further narrowing of the WTI-Brent gap, already forecast to shrink to $5 a barrel this year as new conduits bring Canadian and U.S. shale oil to the Gulf Coast. 
Enbridge, the largest transporter of Canadian crude to the U.S., shut the Athabasca and Waupisoo systems after finding a 750-barrel spill on June 22 from Line 37, a link on the Athabasca system serving Nexen’s Long Lake oil-sands complex.
This provides nice fodder for those who would prefer to see the Keystone XL never built. [8:57 a.m. -- Update: it is now being reported on FOX News:  big contributor to President O'Bama will have financial windfall if the Keystone XL is killed. My hunch: the Keystone XL will be killed by President O'Bama on these grounds: a) there is a glut of pipeline activity, and a glut of oil in the US and more is coming; and, b) it is not proven to "my" [O'Bama's] satisfaction that the Keystone XL would not harm the environment.]

Wednesday Morning News And Links

Active rigs: 187 (steady)

Wells coming off the confidential list have been posted; scroll down.

RBN Energy: tracking where Eagle Ford crude goes -- just one snippet --
The data shows that 62 percent of the 370 Mb/d total waterborne movement out of Corpus in May was destined for either Houston or LOOP. Just under 32 percent of the Corpus outbound volume (121 Mb/d) goes to LOOP - the largest crude oil import terminal on the Gulf Coast – built to offload large crude tankers and as the gathering point for offshore Gulf of Mexico crude production. 
We don’t know for sure but it is a pretty good bet that most of this volume of Eagle Ford production is in fact condensate that is shipped from LOOP to St. James, LA via the LOCAP pipeline where it is transferred to the Capline pipeline for shipment to the Chicago area. From Chicago, supplies of Eagle Ford condensate are then shipped to Western Canada on the Enbridge Southern Lights pipeline for use as diluent to be blended with heavy bitumen crude.
No WSJ links due to time constraints.