Monday, November 11, 2013

Rig Effectiveness, Increased Efficiencies, Baker Hughes To Report Well Counts Alongside Rig Counts

Because of increased efficiencies due to pad drilling in unconventional shale, Baker Hughes will now start reporting the number of wells being drilled as well as rig count, which they have always reported.

Yahoo!News is reporting.
Halliburton noted, “In spite of a relatively flat sequential U.S. rig count, drilling efficiencies in the trend towards multi-well pads are driving a more robust well count.” Producers are still eager to drill wells, and even if rig counts are flat, other services such as well completion are still needed, providing revenue to oilfield service names in the situation of higher well counts. In recognition of this need, as a service, Baker Hughes has begun to report well counts alongside rig counts. Plus, normal seasonality heading into 4Q13 is likely to negatively impact US rig counts.
A related post

The ObamaCare Mulligan

The President's tally will include those who have enrolled but not purchased.

Sort of like President Clinton's "I didn't inhale," I suppose.

You know, it's kind of funny, now. I never read the original story. Here's the original quote as provided by The New York Times:
In a television interview, Mr. Clinton, 45, was asked if he ever violated international law. "When I was in England," he said, "I experimented with marijuana a time or two, and didn't like it. I didn't inhale and I didn't try it again."  
Well, of course, he didn't like it. To really enjoy marijuana, I'm told, one must inhale.

But I digress.

Back to the President's tally to include those who have enrolled but not purchased.

Call it the ObamaCare Mulligan.

[The press will get the "purchased plans" data without too much difficulty. If nothing else, they will extrapolate based on state enrollment plans.]

Zavanna Adding Six New Wells To #20085 In Long Creek; The First Well Has Produced Almost 200K BOE In The First Year

Updates

June 16, 2017: Zavanna with two new permits in Stockyard Creek --
  • 33678, 1,025, Zavanna, Hanson 28-33 5H, Stockyard Creek, t1/18; cum 81K 7/18;
  • 33679, 858, Zavanna, Hanson 28-33 4TFH, Stockyard Creek, t1/18 cum 61K 7/18;
June 5, 2016: halo effect; some incredible notes from a reader.

August 24, 2015:  Zavanna Angus wells ten miles east-southeast of Williston (note: CLR also has "Angus" wells in Elm Tree oil field) --
  • 26687, 1,210, Zavanna, Angus 3-10 7H, Long Creek, middle Bakken, max gas was trip gas of 2,184 units; flares 2 - 6 feet, 19 drilling days, big rig 8 days, 81% within target interval, 24 stages, 2.8 million lbs, t4/15; cum 266K 7/18;
  • 26686, 548, Zavanna, Angus 34-27 4TFH, Stockyard Creek, t9/15; cum 170K 7/18;
  • 26685, 1,543, Zavanna, Angus 3-10 5H, middle Bakken, gas shows as high as 5,770 units, flares 2 - 6feet; big rig - 12 days, 67% within target interval, 35 stages, 3.9 million lbs, Long Creek, t3/15; cum 237K 7/18;
  • 26684, 567, Zavanna, Angus 3-10 3TFH, Long Creek, t9/15; cum 258K 7/18;
  • 26683, 2,950, Zavanna, Angus 34-27 2H, Stockyard Creek, t9/15; cum 387K 7/18;
  • 26682, 2,770, Zavanna, Angus 3-10 1H, Long Creek, t9/15; cum 293K 7/18;
Update on the other wells noted in the original post:
  • 20085, 825, Zavanna, Nelson 3-10 1H, Long Creek, 35 stages; 3.8 million lbs; t8/12; cum 442K 7/18; off-line many months; see much more about this well as this post;
  • 26676, 630, Zavanna, Nelson 3-10 3TFH, Long Creek, t2/15; cum 192K 7/18;
  • 26677, 695, Zavanna, Nelson 3-10 2TFH, Long Creek, total drilling days, 28; "the Three Forks is sourced by the Lower Bakken member"; benches mentioned; "the first bench of the Three Forks is the zone of interest for oil production"; gas shows as high as 6,500 units; difficult to stay in target; majority of the lateral was drilled just above the ideal target zone (2 - 3 feet in TVD); reported dated July 22, 2014; 100% within TF first bench; t2/15; cum 258K 7/18;

Original Post 
A Swedish/Danish family that retains a few mineral acres in the Bakken, alerted me to this note:
Zavanna will add three (3) middle Bakken wells and three (3) TF wells to #20085 in Long Creek. 
The reader suggests I look at the homepage: http://zavanna.com/company.html and: http://zavanna.com/business-strategy.html.

Here's an update of the existing well:
  • 20085, 825, Zavanna, Nelson 3-10 1H, 35 stages; 3.8 million lbs; t8/12; cum 170K 9/13; 
Long Creek is located just to the west of Banks and Truax, a sweet spot in the Bakken. This particular well is located just south of Stockyard Creek, one of the most active and better fields in the Bakken.

For newbies, take a look at that well. It's a non-descript well, a well that would not have caught anyone's attention when the IP was reported (a mediocre 825) and here it is about a year later, and the well has produced close to 200 boe.

The natural gas processing plants in the area are simply inadequate to handle all the production.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN9-2013307504741348081133916359704
BAKKEN8-2013308079808148021157848846694
BAKKEN7-2013319228879757521324868686380
BAKKEN6-2013308771902552891141625678849
BAKKEN5-201331806576325370947613938083
BAKKEN4-201317270125681997383523833
BAKKEN3-20132392969113447617683345214231
BAKKEN2-2013281508615002663325901173638538
BAKKEN1-20133119439200948013295961507814518
BAKKEN12-2012311430013548653318656786110795
BAKKEN11-201230134711346361981487453439531
BAKKEN10-201231160171613976621771540617309
BAKKEN9-20123022106221131081229938205827880
BAKKEN8-20121215835146422229516927016927

From the GIS map server, this is what the area looks like right now, in three screen shots:

First, the two new wells next to the existing well:



Second, six new wells to the west of the existing well noted above:


Finally, zooming out to provide a perspective of the entire area. In this screenshot, the six-well pad is not identifiable as a six-well pad; only #26687 shows up:



And Yet Another Story Involving The Bakken: Propane; A Must-Read For Those Interested In The Bakken

I can't remember if I posted the story about farmers being short of propane to dry their corn, and yet, until I heard that story, I thought there was a huge surplus of natural gas liquids in the US. Some thought it was due to exports.

This is why I love RBN Energy. I consider it a "must-read" for folks interested in the Bakken. Even if their posts are not always about the Bakken specifically, there is almost always something that helps one understand the energy revolution in the US, of which the Bakken is a huge part. And despite the subject, this one is about the Bakken.

Today, RBN Energy provides a great background story to the "shortage" of propane.
Corn drying in the Midwest is finally wrapping up, but farmers and grain elevators are still short of propane supplies even after emergency orders were imposed by several Midwestern governors. The shortage has contributed to a spike in propane prices and the Conway, KS market jumped above Mont Belvieu last week for the first time since February 2011. 
But, there is more to the story.   The upper Midwest is enjoying the largest bumper crop of corn in the record books, and due to recent weather it is “wet” corn needing more drying, thus more propane.  With the U.S. “bumper crop” of propane from processing shale gas flooding the market, you might wonder why there is a problem.  Clearly the answer is logistics – having the barrels at the right place at the right time.  And that’s the reason for more concern when we get to next year.  Because one of the primary propane supply conduits to the Midwest – Cochin pipeline - goes away in early 2014.  Today we start a series to look at what’s going on with Midwest propane and how that market is likely to change when Cochin is reversed and turned into a diluent pipeline.
Later:
Crop drying is an important seasonal source of demand for propane.  Like 90% of all propane in the U.S., most of the supply that feeds Midwestern farmers moves by pipeline at some point in its journey to end users.  A lot of that propane supply comes from Conway, KS the #2 NGL hub in the U.S. that feeds propane up to the Midwest market.  In addition, these days there is a lot more propane coming into the corn drying market via rail and truck from Bakken production in North Dakota.  And Canadian production has traditionally supplemented U.S. supplies coming in from Alberta.

Monday Early Evening: Flaring In The Bakken; NOG; Baker Hughes Suspends Operations In Iraq

A big "thank you" to multiple readers for sending me links to news related to the Bakken on a day in which I was very, very busy.

Baker Hughes suspends operations in Iraq. Rigzone is reporting:
Baker Hughes Incorporated announced Monday that a protest incident by local residents occurred last Saturday at a subsidiary's facility near Basrah, Iraq. No injuries were suffered and the facility was secured. The incident is currently under investigation. Due to the significant disruption of business, Baker Hughes has suspended operations in Iraq, and has issued force majeure notices to its customers.
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Yahoo! News is reporting Bakken operators working to decrease flaring in the Bakken. That's the headline, but as usual, there are some interesting "dots" to connect. The story provides some interesting commentary about the Bakken that is not being reported. 

NaturalGasIntel is also talking about efforts in North Dakota to curb flaring.

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Platts is reporting the growing rift between British Columbia and Alberta over oil shipments, rail and pipeline. 

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

Six companies announced increased dividends/distributions, including a healthy incrase by Snap-On, Inc.

Murphy Oil announces $250 mln accelerated share repurchase transaction.

Schlumberger extends solid early gains to 94.64 and pauses.

NOG trading at a nice entry point -- SeekingAlpha. I have not read the article.  

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The ObamaCare Express: CBSLocal is reporting that Oregon's health care exchange has yet to enroll a  single person. By comparison, North Dakota enrolled 35 in the first few days, and cancelled tens of thousands.
With a reputation as a pacesetter in health care, Oregon laid out bold plans for complying with the federal overhaul.
The state wouldn’t just create a health insurance exchange, a complicated undertaking in its own right. Oregon officials set out to build one of the biggest and best in the nation — a model that other states would want to copy.
But more than a month after Cover Oregon’s online enrollment was supposed to launch, reality is lagging far behind Gov. John Kitzhaber’s grand ideas. The online system still doesn’t work, and the exchange has yet to enroll a single person in health insurance.
No comment (for now).

More on the ObamaCare Express, this time from Reuters:
President Barack Obama's healthcare reform has reached only about 3 percent of its enrollment target for 2014 in 12 U.S. states where new online health insurance marketplaces are mostly working smoothly, a report released on Monday said.
States with functioning exchanges have signed up 49,100 people compared with the 1.4 million people expected to be enrolled for 2014, according to the report by healthcare research and consultancy firm Avalere Health. 
With enrollment in the federal HealthCare.gov website serving 36 states stalled by technical failures, the weak sign-ups for functioning insurance exchanges could be due to the administration's difficulty to promote the program as a success, Avalere said. 
The government is due to release national enrollment figures for the month of October this week. Open enrollment ends March 31, 2014.
A reminder: Consumer Reports advises folks to stay from the on-line exchange. Among all the other problems, the site has never been fully checked -- "end-to-end, -- as they say.

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Veterans Day; Blogging Will Be Delayed

I have a school function to attend this morning, honoring veterans. Our granddaughter, in second grade, wants me to visit her class.

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Later.

Random photos taken by our second-grade granddaughter at her school, in her classroom, on Veterans Day. 





North Dakota Makes The Big Time -- Drudge Report

Screen shot from Drudge Report.


Per capita, North Dakota has the greatest success of all the US states in ObamaCare enrollment in the early days. Delaware, for example with a population almost 50% more than North Dakota only signed up four in that same period of time (and a cost of $4 million). North Carolina signed up only one individual and he/she did not pay the premium.