Saturday, December 7, 2013

Status Of Permits Issued In Calendar Year 2009; Ice In Dallas

Status of permits issued in calendar year, 2009.

Number of permits issued: 625

First permit: #17946

Last permit: #18570

Number of permits canceled (PNC): 72 (12%) In addition, two permits expired. 

Number of wells still on confidential list: 10

Number of wells on "DRL" status: 4

There were eight DRY wells; not all of them were Bakken wells.

Four wells are currently "inactive." Most of these wells will probably return to production. 

Four wells were abandoned (AB). 

Two wells temporarily abandoned.

One "WI" well.

One "loc" permit: permit only, no activity at the site.
  • 517 wells reported IPs.
  • Greater than 3,000 bbls: 9
  • 2,000 to 2,999 bbls: 44
  • 1,000 to 1,999 bbls: 128
  • 750 to 999 bbls: 79
  • 500 to 749 bbls: 79
  • 250 to 499 bbls: 97
  • 100 to 249: 53
Although this number means absolutely nothing, the "average" IP worked out to 918 bbls.

Whiting clearly had the largest number of "high IP" wells. Whiting had 22 wells with IPs above 2000. BEXP (now Statoil) had 8 such wells. Anschutz (later OXY USA) had 5. 

Most surprising data point: almost every well that had an IP was still actively producing. Early on there was a lot of talk about poorly producing Bakken wells being abandoned. So far that has not happened. I think there may be some non-intuitive reasons why these wells are kept on-line. See this post


Along with the analysis above, I noted the total production of each well as of October, 2013:

One well: 814,000 bbls

One well: 652,000 bbls

Five wells: 500,000 to 599,000 bbls (which included on Lodgepole well)

Ten wells: 400,000 to 499,000 bbls

37 wells: 300,000 to 399,000 bbls

115 wells: 200,000 to 299,000 bbls

226 wells: 100,000 to 199,000 bbls

Comment: look at the total production to date of these wells. The permits were let in 2009 and the majority of these wells were drilled/completed in 2010. These wells are less than three years old and out-producing Madison wells that produced for 30 years. Yes, the decline rate is horrible. So what. In two years, the wells paid for themselves; they out-produced Madison wells in tenth the time; and, then get this: they are mostly short laterals, relatively inexpensive (compared to later wells); and, they are going to keep producing for 30 more years. But there's a surprise coming, that will make these wells much more exciting than anyone can imagine.

Other comments: 
  • most of these wells were done early on in the Bakken boom
  • operators were still learning 
  • the number of frack stages were at the lower end
  • most of the wells were short laterals; the Whiting wells were the exception
  • at this time, it was generally assumed that wells that reached 100,000 bbls had paid for themselves 
  • there will be very few wells that won't pay for themselves on this list, and even with "poorly performing" wells, I think we are still in for a surprise

A Note to the Granddaughters

I watched Hunger Games for the first time ever tonight -- on Blu-Ray. It was incredible.  I was not looking forward to watching it; the story line of children fighting to the death was not something I wanted to watch.

However, this is why "the movie" worked. The "children" were all 18 years or older. The same age as men and women fighting against each other in Afghanistan. So, are they children? It depends on one's perspective. For sure, in the 21st century, childhood, adolescence, and young adulthood are delayed/prolonged.

Young adults, now well into their late 20's and even early 30's are still living with their parents, as children. Interestingly enough, the delayed/prolonged childhood has been legitimized by Obamacare which requires that children up to age 26 be allowed to remain on their parents' health care insurance policies.

I was impressed that the director minimized scenes of violence; most was left to one's imagination. It is PG-13 and appropriately so. Highly recommend it. If you see it on DVD, be sure to see the Blu-Ray version with all the extras and special features. 

Scary, Huh?

Last week I posted my thoughts on the likely outcome of Obamacare. Until the Obamacare fairy godmother waves her magic wand and completely changes everything, I will go with the premise in that post, i.e., one cannot put the genie back in the bottle. The genie being the incredible coverage with the insurance companies holding the bag (unlimited liability).

But one really has to laugh: everything Nancy Pelosi said about the bill is true: we won't know what's in it until it's passed.

Apparently that is "more true" than one can imagine.

The AP is reporting:
After weeks of repairs, the administration announced last week that the worst of the technical problems had been fixed and that the site was working reasonably well for most users. But it's too really to say if the website has really turned a corner. It's also quite likely that the White House will stumble into another crisis as officials try to implement a complex, politically polarizing law with broad effects on society. [Translation: even the White House isn't sure what else might show up in the law that no one read.]
Well, maybe one person has read the law.

And the White House has invited him back to explain it to Washington. To explain to everyone what else might show up in the bill. Like the fact, that technically, the law prohibits the federal exchange from offering subsidies for insurance premiums.
President Barack Obama is bringing a former top aide with deep ties to Congress back to the White House to help get his health care overhaul back on track after a bungled rollout. Officials say Phil Schiliro, who as Obama's top liaison to Capitol Hill helped push the Affordable Care Act through Congress, is taking on a short-term assignment to help coordinate policy surrounding the law.He'll work with the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, other agencies and members of Congress.
Nancy had it exactly right. Scary, huh?

Request For Information: US Army Corps Of Engineers And Flow Easements

I know nothing about this, but a reader asked. It was something new to me, so I'll ask the question, see if anyone knows what I'm talking about. It will help me/others understand the process.

It has to do with the US Army Corps of Engineers (USACE) and "flow easements" along the river.

I assume the "flow easement" does not negate the possibility of a horizontal well extending under the easement or under the river; obviously there are horizontals everywhere under the river.

According to the reader, the operator did not renew the lease and appears not to be interested in drilling in this area (where the USACE has the easement).

Is there something unique about a flow easement that makes drilling here unlikely, or is this purely coincidental, that the USACE has a flow easement here and the operator chooses not to drill?

Is this simply a question of whether the "government royalties" will go to the state or to the federal government (the "riparian" argument in the Bakken)? Who adjudicates the permit, the state or the BLM when the USACE is involved?

If this is all related to the BLM and the BLM backlog (the fact that the operator shows no interest in drilling where there is a "flow easement," is there any way to work with the BLM or USACE (i.e., "negotiate" with the USACE) or this pretty much final?

I have no clue, and the way I ask my questions may show my ignorance. One could refer the question to a mineral owners forum but I am curious how this works.

Random Update Of #18298

Idle chatter; not sure if this is worth posting, but not much else going on.

NDIC File No: 18298     API No: 33-061-01112-00-00     CTB No: 218298
Well Type: OG     Well Status: A     Status Date: 1/9/2010     Wellbore type: Horizontal
Location: SESE 33-154-91     Footages: 900 FSL 250 FEL     Latitude: 48.112497     Longitude: -102.375624
Current Well Name: KANNIANEN 44-33H
Elevation(s): 2386 KB   2356 GL     Total Depth: 19800     Field: SANISH
Spud Date(s):  11/6/2009
Casing String(s): 9.525" 2233'   7" 10462'  
Completion Data
   Pool: BAKKEN     Perfs: 10462-19800     Comp: 1/9/2010     Status: AL     Date: 9/9/2010     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 528551     Cum MCF Gas: 355952     Cum Water: 37594
Production Test Data
   IP Test Date: 1/10/2010     Pool: BAKKEN     IP Oil: 3422     IP MCF: 2068     IP Water: 2342
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Note that the well above was taken off-line July - August 2013. The neighboring/parallel horizontal, #25350, Carl Kannianen 24-33H, was fracked during that period. One might imagine the well above to be declining ever so slightly, although that can be argued. However, when it came back on line, it was definitely a better well, producing nearly 10,000 bbls/month, which was a significant increase from before and reversing the trend. I have no idea if there might be other explanations, but it is a phenomenon worth watching. A better example is found here.  

BLM Permit Backlog: 525 Permit Applications, The Backlog Continues To Grow

I don't think The Dickinson Press noted that it takes the BLM about 300 days to issue a permit; the NDIC processes applications in about 60 days.  It's like watching sausage being made, I suppose, but I would be hard pressed to tell the difference between a permit that took 300 days to process and a permit that took 60 days to process. I'm not talking about the shortage of staff; I'm talking about all the extra sets of eyes that the BLM requires for each application.

Back in the "old" days, back in 2012, the BLM actually saw an urgency, establishing "strike teams" that on one occasion processed 300 permits in one month. The Dickinson office processes about 40 applications/month now.

The NDIC averages about 50 applications / week based on my database.

The Dickinson Press story is linked here.

Imagine if the entire Bakken were under federal land. Actually, I doubt there would be any Bakken to imagine.  At least one can argue the BLM is not worried about the Red Queen.

Random Update: Weather/Temp In Southwestern North Dakota

Don sent these early this morning, the three-day temperaturs in Bowman, ND, all in F degrees.

  • Thurs Morning low, -22 below
  • Fri morn low -26 below, 
  • Today.Sat morn low -28 below. 
  • Thursday high temp -6 below, 
  • Fri high Temp - 8 below, 
  • Today forecast of a -9 below for Sat high. 
Looks like the cold is breaking because the low for Sunday morn is to be -13 below, so temp relief is coming.

Well, that's good to hear. A short winter this year. LOL.

A big "thank you" to Don for the update. Saves me time. I'm in the process of updating cumulative production for all wells with permits issued in 2009.