Sunday, July 12, 2015

Williston's New Workforce Training Center Completed -- July 12, 2015

The Dickinson Press is reporting:
Williston -- A new $7.5 million, 19,740-square-foot, workforce training facility in Williston is complete, filling a demand for oil industry training that remains strong despite a slowdown in drilling.
The new building for TrainND’s Northwest Center at Williston State College brings the classroom training together with its petroleum simulators and field program, which features a workover rig and other oilfield equipment.
The workforce training program has seen a drop in participants along with the decline in oil activity, but it hasn’t been as significant as some had projected.
For the 2014-15 school year, TrainND in Williston provided training to more than 320 businesses and 14,000 participants, including some who took more than one training course.
That represented a drop in enrollment of about 2,000 people from a year ago, but enrollment was higher than in 2012-13.
Many companies in northwest North Dakota are trying to keep their good employees during the downturn and are using the slow time as an opportunity to take refresher courses or update safety certifications.
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Speaking Of Training

This is so cool. On July 8, 2015, I posted a link to a story about President Obama spending $500 million to train 60 Syrian Army soldiers.  The complete post:
Recruited 60 soldiers.

$500 million / 60 = $8 million /  soldier.

But they have really nice uniforms. I can't make this stuff up.
For those folks who still support President Obama, they simply are not paying attention. 
Now, a week later, the folks over at the Los Angeles Times finally picked up on the story:
Sixty? UCLA has more men on its football roster. That's "not an impressive number," Carter acknowledged.
Skeptics instantly did the arithmetic: If that's all we get for $500 million, it comes to almost $9 million per fighter — and the trainees haven't even made it onto the battlefield yet.
Actually, a Pentagon official said, only $36 million has been spent so far, and some of that includes start-up costs for a program that still aims for 15,000 trainees — just much more slowly than expected.
Still, the story of the Pentagon's amazing shrunken training program — an idea that almost looked bold when Obama first proposed it — could serve as a metaphor for the whole of U.S. strategy in Syria: ambitious in its goals, but so risk-averse in design and so hamstrung in execution that it remains painfully ineffective.
Wow, it's going to take a whole LA Times column to say what I said in less than 35 words.

The real question is how much did the Iraqi government skim off the top of the $500 million? My hunch: not less than $490 million.

$10 million should still be enough for spiffy uniforms. Even in Iraq.

Most of which are probably being worn by ISIS by now.

Let me say it again for those folks who still support President Obama: you are simply not paying attention. 

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Irony: Not Everyone Gets It

The problem with irony, not everyone gets it. -- Ray Wylie Hubbard

Did You Get The Beer?, Ray Wylie Hubbard


Up Against The Wall, Redneck Mother, Ray Wylie Hubbard, Jerry Jeff Walker


London Homesick Blues, Gary P Nunn, Jerry Jeff Walker

Black Hills Corp Looks To Increase Its Customer Base By More Than Half -- July 12, 2015

Updates

July 13, 2015: SeekingAlpha's data points -- note the very last data point --

  • Diversified energy firm Black Hills has agreed to acquire natural-gas utility SourceGas Holdings for $1.89B from investment funds managed by General Electric and Alinda Capital Partners.
  • The deal allows the South Dakota based Black Hills to expand in Colorado, Nebraska, Wyoming and Arkansas, and "will add meaningfully to Black Hills' earnings per share beginning the first calendar year after closing," the company said.
  • Black Hills expects that closing to come in H1 2016, at which point the utility will assume $720M of debt.
  • SourceGas has 425,000 customers and a 512-mile transmission pipeline in Colorado. The combined company will have over 1.2M customers.
  • SourceGas had also attracted interest from other prospective buyers, including MDU Resources 
Original Post

Multiple sources are reporting. From Reuters:
Energy company Black Hills Corp said on Sunday it signed a deal to buy natural gas utility company SourceGas Holdings LLC for about $1.9 billion.
The acquisition of Golden, Colorado-based SourceGas will increase Black Hill's customer base by 55 percent to more than 1.2 million customers.
General Electric and Alinda formed SourceGas in 2007 through the acquisition of a Kinder Morgan Inc unit for $710 million. 
As I told the reader who sent the link:  
Interesting. I love these articles.
For all the press, and all the ink, and all the hysteria, and all the opportunities in wind and solar energy, the big deals are still being made in fossil fuel energy.
Having said that, I must be really missing something. $1.9 billion? Look at the key statistics for Black Hills Corp.
Maybe I'm looking at the wrong company: $3.7 billion enterprise value; $2.1 billion market cap. Hardly any cash. I must be missing something. $2.1 billion market cap is pretty close to the buying price of $1.9 billion. The margins on Black Hills Corporation natural gas must be huge.
The math:
  • increase its customer base by 55% to more than 1.2 million customers
  • 1.55 x current base = 1.2 million customers
  • current base = 775,000 customers
  • 1.2 million customers now - 775,000 customer base = 425,000 new customers
  • $2 billion / 425,000 customers = $5,000 / new customer
That ain't bad.

Then you throw in:
SourceGas operates more than 19,340 miles of natural gas distribution, gathering and transmission pipelines as well as storage facilities in Arkansas, Colorado, Nebraska and Wyoming. 
It costs about $500,000 to lay a mile of pipeline across easy prairie, upwards of $2 million/mile under water. And that's assuming Tom Steyer will let you build a new pipeline.

Note: I often make simple arithmetic errors. If this information is important to you, go to the source.

Random Update Of A Recently Re-Fracked MRO Well In Killdeer Oil Field, July 12, 205

This is really, really cool. It took a lot of time scrolling through well reports, but I finally a good example. 

A long, long time ago (back in 2011), I went through a gazillion "early" MRO wells to see which ones might be good candidates for re-fracking.

Today, going through the list again, I found this one, which was on the original list of wells that I considered candidates for re-fracking:
  • 17375, 539, MRO, Kent Carlson 14-36H, Killdeer, t9/09/ cum 183K 5/15;
Take a look at the recent production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20153110312103184625861762141114
BAKKEN4-201523980197924809797933703428
BAKKEN3-20152010082102116190764735402912
BAKKEN2-2015281391314017106381163173942579
BAKKEN1-2015865006337326449227281030
BAKKEN12-201438209995919
BAKKEN11-20143010611139199845178373
BAKKEN10-2014311090115816488048097
BAKKEN9-20143010551115156853452108
BAKKEN8-20143111101130159897286306
BAKKEN7-201431111890915293158342
BAKKEN6-20143010901136160920507116

This was the production profile for the well's first six months:

BAKKEN11-20093029002824355130413040
BAKKEN10-20093135873655487146614660
BAKKEN9-20093040304087527186718670
BAKKEN8-20093149874794675230023000
BAKKEN7-200931741676321078332733270
BAKKEN6-200919653359581213273827380

Pretty incredible, huh? Producing about 1,000 bbls/month, then re-fracked in January, 2015, and four months of 10,000 bbls/month production.

This was the original completion report:
  • 17375, 539, MRO, Kent Carlson 14-36H, open hole stimulation, 200K lbs; on June 4, 2009.
This is the fracking reported received just a few weeks ago by the NDIC, received May 11, 2015:
  • 17375, 1,124, MRO, Kent Carlson 14-36H, stimulation date: 1/27/2015; 30 stages, 2.2 million lbs
I was too tired to go through any more of the original list at this time, but I assume there will be more examples; will go back and look another day. 

Wells Coming Off Confidential List Monday, The Weekend -- July 13, 2015

In a long post like this, there will be typographical and factual errors. In addition, I have no background or training in the oil and gas industry and will mis-read and misinterpret data and file reports. Much of the shorthand is my own and does not necessarily represent an industry standard. If this information is important to you, go to the source. Do not quote me on any of this stuff but feel free to read it at your leisure and look for all the errors and mistakes. 

Monday, July 13, 2015
  • 29431, SI/NC, BR, Kings Canyon 6-1-27MBH, Camel Butte, no production data,
  • 29807, 352, Ballard Petroleum, Nelson 34-19, Chatfield, a Madison well, vertical hole, 2 stages, acid only, t31/5; cum 21K 5/15;
  • 29954, drl, Statoil, Smith Farm 23-14 5H, Cow Creek, no production data,
  • 30002, drl/NC, XTO, Porcupine Federal 44X-2D, Bear Creek, no production data,
  • 30143, SI/NC, Statoil, Folvag 5-8 XE 1H, Stony Creek, no production data,
  • 30319, 947, Slawson, Peacemaker Federal 1 SLH, Big Bend, t3/15; cum 9K 5/15; though now off-line
Sunday, July 12, 2015
  • 28962, 1,070, Hess, LK-Erickson-147-97-1102H-4, Little Knife, 10-foot thick window; gas in the middle Bakken averaged 3,100 units with a 10 - 12' flare, t5/15; cum 15K 5/15; after ten days, 15K
  • 29654, drl/NC, Newfield, Olson 152-96-30-31-13HLW, Westberg, Three Forks, 59% drilled in 12' target zone (within the Three Forks formation 100% of the time, 59% in the 12' primary Three Forks target, 21.8% in the upper Three Forks "B" facies, and 19.2% in the upper Three Forks "A" facies), producing, 13K after 15 days;
  • 29981, SI/NC, BR, CCU Dakotan 1-7-17MBH, Corral Creek, no production data,
  • 30274, 1,813, MRO, Klee 11-3TFH, Bailey; middle Bakken 37' thick; the Three Forks was a 10' target window; gas as high as 5,835 in the middle Bakken; gas units also high in the Three Forks lateral, max at 2,243 units; well-bore was maintained within the target interval for 79% of the 10,087' exposure to the Three Forks, 34 stages, 4.4 million lbs, t4/15; cum 30K 51/5;
Saturday, July 11, 2015
  • 29460, 219, Denbury, CHSU 44-26SH 15, Cedar Hills, a South Red River well, t4/15; cum 12K 5/15;
  • 29632, 2,794, MRO, Wilbert 44-8H, Bailey, 4 sections, 34 stages, 4 million lbs, t4/15; cum 53K 5/15;
  • 29633, 2,400, MRO, Hammel 44-8TFH, Bailey, TF1, middle Bakken 19 feet thick; 10 - 12' Three Forks target zone, highest gas in the lateral was 4,275 units; 5 - 15' trip flare, no other flare seen; well-bore maintained within the target interval for 77% of the 9,892' lateral; 17 drilling days; 34 stages, 5.6 million lbs, t4/14 cum 41K 5/15;
  • 29824, 522, Hess, GN-Raylena-158-98-1621H-3, Rainbow, 2 - 25' flares; 3,743 gas units max (trip) with an average of 330 units throughout the lateral, 10' target window set 16' feet into the middle Bakken;, t6/15; no production data,
  • 29959, drl, Slawson, Skybolt Federal 1 SLH, Big Bend, no production data,
  • 30001, drl/NC, XTO, Porcupine Federal 44X-2H, Bear Creek, no production data,
  • 30049, drl/NC, XTO, Marlene 42X-20C, Blue Buttes, no production data,
  • 30275, 367, CLR, Elias 1-21H, Burg, 25-foot target zone; 90.57% drilled within the target zone, 9.43% drilled above the target zone; 12 days drilling, 30 stages, 3.4 million lbs, t3/15; cum 17K 51/5; Weatherford SLS, Maggie Silvertooth CLR Company Geologist set a new standard, raised the bar on drilling reports. Absolutely outstanding.

Propane 101 -- July 12, 2015

A reader sent me this link for various reasons. It's a good read.

The best part of the article was the explanation by the president of this Canadian oil and gas company with regard to "shutting in" propane.
Unfortunately, the usual solution for low prices – shutting in production and reducing supply – isn’t so easy for propane. The decision is a bit more complex than that, and so some explanation is required.
Starting back in the reservoir, raw natural gas is typically at a temperature and pressure where propane molecules (C3H8) are in gaseous phase – as are the methane (C1H4), ethane (C2), butane (C4), and many of the heavier hydrocarbon chains (C5+).
As this raw gas is produced up the wellbore, the temperature and pressure drops and the heavier hydrocarbons condense into liquid form. What tends to arrive at the low pressure inlet of our gas plants, for example, is a mix of liquid condensates and pentanes, along with gaseous lighter hydrocarbons.
These gases still contain too much of the heavier hydrocarbons to safely consume in our homes, so Peyto has to process the gas (dry it and cool it) to remove the water vapour and condense even more of the heav ier hydrocarbons out of the gas.
Our sales products, at the out let of our facilities, ends up being stabilized condensates, a mixture of pressurized LPG (Liquid Petroleum Gases), and high pressure lean gas. The LPG is a mix of approximately 1/3 Pentane (C5+), 1/3 Butane (C 4) and 1/3 Propane (C3). This LPG mix is then transported to a refinery where it is “fractionated” or distilled into the pure components.
As you would expect, shutting in just the propane because its price is negative, isn’t possible. You’d have to shut in the entire gas stream. Alternatively, warming up your plant process to condense less propane into liquid form (thereby leaving it in the gas phase) also leaves some butane and pentane in gas phase and those products are still worth more as liquids than gases. Plus, at some point, the gas becomes too rich to make lean gas specifications. So the decision of what to do about negative propane prices, like we’ve had in April and May is a much more complex one.
Our solution at Peyto has been to extract all of the more valuable liquids (C4 & C5+) that we can and then try to “push” an optimal amount of the propane back into the gas stream so that we get paid in increased heat content in the gas rather than liquid barrels. This is often referred to as propane rejection.
In order to find that optimal amount, we have to consider all of the component prices and the liquid recoveries at various process conditions. We are looking for the most optimal combination of gas and liquid recoveries which yields the greatest possible revenues.
This optimal combination won’t necessarily yield the greatest combined production volume. But maximum production is not the point, maximum revenue is. As I’ve said before, this is one of the reasons why owning and operating your own processing facilities is so important.

Cherry Creek Oil Field Is Updated, July 12, 2015

While updating the Cherry Creek field, ran across this well. Needs to be followed. Bad frack or something else going on?
  • 27885, 130, Hess, BW-R Peterson-149-99-1102H-4, 1 stage frack, 200K lbs sand, t6/15; cum --
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The Sports Page
NBA

In my adult life I have spent more years in San Antonio than any other city, thirteen I believe. My wife's family is from Los Angeles.

San Antonio has only one professional sports team among the big four sports: the Spurs. I think of San Antonio as a basketball city first and foremost. It unites the south half of the city with the north half. While living withing walking distance of SAT for over a decade, it was my impression that San Antonians had two seasons: basketball season and looking forward to basketball season.

Similarly, despite being so much else, when I think of Los Angeles, I most often think of the Lakers. Perhaps the connection with Phil Jackson who grew up in Williston, living in a house just one block from where I grew up, reinforces the connection.

So it was with fascination and interest to follow the NBA draft and free-agency trading of the past few weeks. I don't follow the NBA all that closely any more but enough to enjoy it. In today's Los Angeles Times, the sports writers look at the winners and losers. Among the five winners: San Antonio Spurs, at the top of the list, #1; and the LA Lakers, at #5.
The Spurs made the biggest splash in free agency and have put themselves back in the conversation as a major contender for the NBA crown.
They lured unrestricted free-agent All-Star power forward Lamarcus Aldridge away from Portland, giving him an $84.1 million contract. Then San Antonio won the derby for free-agent power forward David West giving him a veteran minimum deal of $1.5 million.
Equally important, the Spurs re-signed their best young player Kawhi Leonard ($95.3 million) and guard Danny Green ($45 million) and found out ageless wonders Tim Duncan, 39, and Manu Ginobili, 37, are returning to play.
The Spurs players must absolutely love their coach to stick with him all these years. It really is quite amazing.

That story about signing David West for a veteran minimum of $1.5 million was shocking. Again, from The Times:
It has to be bad in Indianapolis if David West opted out of his contract, and walked away from $12.6 million, to take an $11.1 million pay cut to sign with the Spurs.
West didn't like the way the Pacers treated his friend, Hibbert. Pacers' boss Larry Bird soured on Hibbert and made it clear he wanted to move the center to another team. 
Hibbert was traded by the Pacers to LA Lakers a few days ago.

But getting back to David West: can you imagine anyone walking away from $12 million to take a $1.5 million salary? His agent must be going nuts. With a decision like that, maybe he needs a new agent. At least there's no state income tax in San Antonio, and the weather is a whole lot nicer.

And back to the Spurs: Duncan and Ginobili staying on for another season. The arena is always sold out in San Antonio, but with Duncan and Ginobili coming back that is simply incredible for the fans.

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If You Look Hard Enough, You Might See The Staples Center

The Banks Oil Field Has Been Updated -- July 12, 2015

The Banks oil field is one of the most active fields right now (slump in crude oil prices continues); note all the permits in 2015 so far (at the link).

Regular readers know the historical typical IP and production profiles of CLR wells. This is what CLR is now doing in the Banks, a huge difference for CLR compared to a couple of years ago:
  • 28737, 1,423, CLR, Uhlman 1-7H, 40 stages, 6 million lbs, t1/15; cum 103K 5/15;

  • PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN5-201531174331733659592502823781999
    BAKKEN4-20153022678219729133321172079511089
    BAKKEN3-2015251793918774706327206231583876
    BAKKEN2-2015282093521069781330616274842944
    BAKKEN1-201527220682172410384293621923610126
    BAKKEN12-2014922611577117821514701514
     
Fracking was done via a 4.5 inch horizontal liner with OH packers utilizing 40 stages & plug & perf.

Spud date: September 10, 2014; build began on the evening of September 15, 2014;
TD date: September 25, 2014
In the zone: 100%



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Notes to the Granddaughters
Memories

This was the letter of acceptance we received while I was with the USAF stationed in England back in the 1980's. This was the official letter of acceptance for our 5-year-old daughter, your aunt Laura, to enter kindergarten. This was not a private school; this was a local community kindergarten open to all living in the community. One would have thought she had just been awarded a Rhodes Scholarship.


Random Update Of Statoil's Brown Wells In Alger Oil Field -- July 11, 2015

Updates

October 21, 2018: production updated; see below.

December 31, 2016: the Brown wells were updated at this post

Original Post
 
On November 17, 2014, I added this note:
Statoil's Brown wells will be their first crack at cemented liners and increased frac stages. Will be interesting to see the difference. [ 27003, 27004, 27005, 27006, 28733, older wells: 20790, 18760].
I do not know where I found that information; if someone sent it to me; if it was in a conference call, or if it's even accurate.

Be that as it may by, I might as well track the Statoil Brown wells in 31-156-93 in Alger oil field:
  • 27003, 3,182, Equinor/Statoil, Brown 30-19 3H, 44 stages, 5 million lbs, t11/14; cum 244K 8/18; only 16 days in 4/15; only 170 bbls 9/16;
  • 27004, 2,358, Equinor/Statoil, Brown 30-19 4TFH, 32 stages, 4.7 million lbs, t11/14; cum 175K 8/18; 15 days / month average on-line; only 54 bbls 9/16;
  • 27005, 2,126, Equinor/Statoil, Brown 30-19-5TFH, 29 stages, 3.8 million lbs, t11/14; cum 152K 8/18; 15 days / month average on-line; only 16 bbls 9/16;
  • 27006, 2,775, Equinor/Statoil, Brown 30-19 6H, t11/14; cum 165K 8/18; 15 days / month average on-line; only 83 bbls 9/16;
  • 20790, 2,691, Equinor/Statoil, Brown 30-19 2H, 37 stages, 3.9 million lbs, t10/11; cum 244K 8/18; off-line for six months; only 8 bbls 9/16;
  • 28733, 2,400, Equinor/Statoil, Brown 30-19 7TFH, 40 stages, 4.6 million lbs, t12/14; cum 219K 8/18; off-line much of 4/15;
  • 18760, 2,789, Equinor/Statoil, Brown 30-19 1H, 37 stages, 3.7 million lbs, t4/11; cum 304K 8/18; really, really choked back since 8/14