Explanation For Production Anomaly Reported In The Pyramid Wells -- March 18, 2015

Last night, when updating production numbers for the Pyramid wells on what used to be the northwest edge of Williston, I noted something unusual about the production profile for a number of Pyramid wells.

A reader explained it:

If you look at the Pyramid 3H production in the same month (8-14) that you noted low production on a number of other Pyramid wells, you will see a large spike in oil production. This is almost certainly due to some sort of miss on the allocation.

(This production should have been spread across the other wells.)

On the large multi-well pads, the wells often share facilities and the total production (from all wells on pad) goes into the facilities; the production has to be allocated back to each individual well.

It depends on the individual pad and operator set-up, but this is often done with separator meters. If even one of these meters is out of whack or not working it can throw off the production allocation back to each well.

The volumes for the entire lease will be correct, but at the single well level it may differ from what really happened. In this case if you look at the water volume (metered and allocated separately) you will see the wells all produced about the same water volume as you would expect for the month which leads me to believe it was just an oil allocation (bad meter) issue.

I have seen any number of things throw off allocations to individuals wells, my favorite (so far) was a mouse stuck in a water meter.

A huge "thank you" to the writer for taking time to write.

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Today's EIA Brief: Ecuador

From today's EIA brief:

In Ecuador, the oil sector accounts for more than half of the country's export earnings and approximately two-fifths of public sector revenues.

Ecuador is the smallest producer in the Organization of the Petroleum Exporting Countries (OPEC) and it produced 556,000 barrels per day (bbl/d) of petroleum and other liquids in 2014, of which crude oil production was 555,000 bbl/d.

A lack of sufficient domestic refining capacity to meet local demand has forced Ecuador to import refined products, limiting net oil revenue. --- EIA 

Ecuador may be the smallest OPEC producer, but the US imports appreciably more oil from Ecuador than from the largest west African producer, Nigeria.

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Easy Come, Easy Go

The Los Angeles Times is reporting:

Authorities have [quietly] revoked the [state] tax-exempt status of nonprofit Blue Shield of California, potentially putting it on the hook for tens of millions of dollars in state taxes each year.

The move by the California Franchise Tax Board comes as the state's third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves.

The state quietly stripped the San Francisco insurer of its exemption from California income taxes in August. The company held that since its founding in 1939.

A spokeswoman for the tax agency declined to comment on the reasons for revocation.

The highly unusual action comes after a lengthy state audit that looked at the justification for Blue Shield's taxpayer subsidy.

The insurer has paid federal taxes for years.

Blue Shield said Tuesday that it's protesting the decision. In the meantime, state officials have ordered it to file tax returns back to 2013.