Friday, April 22, 2016

Halo Effect? You Betcha -- April 22, 2016

Updates

May 10, 2017: after having looked at many other wells, I have to re-think this one. When there is a jump in production this great, it's hard to call it a halo effect; it almost has to be the result of a re-frack. In this case there is no sundry form saying this well has been re-fracked and there is no FracFocus report of a frack in 2014; by 2014, frack reporting was mandatory. The file report does say that this well as put on SI (shut-in) status while neighboring wells were being fracked but did not say that this well also being fracked. The neighboring wells being fracked by another operator. 

So, this is the conundrum: the jump in production is so high, one has to conclude it was re-fracked but no one has written in to tell me that the well was re-fracked and there is no report suggesting it has been refracked.
 
Original Post
Here's the relevant production profile:


Typical production / month was around 4,000 bbls of oil/month, prior to October, 2014. Then it jumped to 16,367 bbls in November, 2014.

The well?
  • 20510, 705, Zavanna, Everett 115H, Stockyard Creek, t1/12; cum 236K 2/16; off-line since December, 2015;
There were two other middle Bakken wells that intersected this well, and were fracked in September, 2014 

The interesting thing is that #20510 was a Zavanna well; the wells that intersected this well were Slawson wells.

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Earth Day, 1970: Predictions

Four predictions:
  • the civilized world would end in three decades -- Nobel laureate George Wald.
  • England would be hit by food shortage; civilization would collapse -- Paul Ehrlich, author of The Population Bomb
  • gas masks would be required in cities, due to pollution -- Life Magazine
  • the world's supply of oil would run out -- Kenneth Watt, an ecologist
I'm serious: was there any prediction in 1970 that panned out?

We need to jail global warming skeptics -- Bill Nye, the science guy.

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Taxi, Henry Chapin
If not the best song ever, it's on the top ten list.

Week 16: April 17, 2016 -- April 23, 2016

The Bakken
Just how incredible is the Bakken?
Get ready for "fast and furious" -- Lynn Helms

Operations
Sinclair has a slew of new permits
Rocky Ridge - Fritz 1 permitted for re-entry
New post-boom low: 28 active rigs
Top 20 oil fields in North Dakota

Fracking
Mike Filloon's update: focus on proppant  

Miscellaneous
Gasoline demand on glide path to set all-time record
Saudi Arabia takes out $10 billion loan -- to learn how to do it
Doha -- underwhelming

Sinclair Adds Three (3) More Permits -- April 22, 2016

Active rigs:


4/22/201604/22/201504/22/201404/22/201304/22/2012
Active Rigs2988187186210

Sinclair has three (3) new permits --
Five (5) permits renewed:
  • HRC (2), two Ann H. Thome permits, both in Williams County
  • Lime Rock (2), two State Dvorak permits in Dunn County
  • Ballard, a Nelson permit in Bottineau County
Samson Resources cancelled three permits: two Beetle permits and a Charger permit, all three in Divide County

Reality Of Life -- Minimum Wage At UC Berkeley -- April 22, 2016

Reason #235 why I love to blog:
Back on October 31, 2015, I posted:
Saturday mornings in north Texas belong to "other" breakfast restaurants, but we seldom go any more: the lines are way too long, and the waits are upwards of 90 minutes. Yes, the Texas breakfasts are that good. But now McDonald's has added a new wrinkle.

Something tells me that we will be reading articles at the end of this business quarter about the decision made by McDonald's to offer breakfast all day long.

It's very possible someone is going to look like a genius.

It would have been fun to sit in on the focus groups and the PowerPoint Presentations when the idea of "all-day breakfast" was being pitched at McDonald's.
Now this, today, from Yahoo!Finance:
McDonald's just reported quarterly sales that beat analysts' expectations.
In the US, first quarter comparable sales increased 5.4%, fueled by the ongoing popularity of All Day Breakfast and the introduction of McPick 2 - a branded national value platform.
Analysts were looking for a more modest 4.4% gain in comparable sales, which represents sales growth in stores open for more than a year.
McDonald's fans' wish for breakfast served all day came true last fall. While this has been disruptive for the competition (and some franchisees), it has been a hit with customers. And McDonald's numbers show it. 
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UC Berkeley School of Hard Knocks MBA

Investor's Business Daily is reporting:
Hundreds of employees at the University of California at Berkeley are getting schooled in basic economics, as the $15 minimum wage just cost them their jobs. Too bad liberal elites “fighting for $15” don’t get it.

A week after California Gov. Jerry Brown signed the state’s $15 minimum wage boost into law, UC Berkeley Chancellor Nicholas Dirks sent a memo to employees announcing that 500 jobs were getting cut.

Coincidence? Not really.

Last year, University of California President Janet Napolitano announced plans to boost its minimum wage to $15 at the start of next school year, independent of the state law. Since UC Berkeley was already in financial trouble — it ran a $109 million deficit last year and is projecting a deficit of $150 million this year — number crunchers there had to have factored in the higher mandated wage when making their layoff decisions.

Those workers might want to have a chat with the folks at UC Berkeley’s Center for Labor Research, who just days before Brown signed the wage-hike bill released a study touting the minimum wage as a boon to low-income household breadwinners.

After that report came out, Ken Jacobs, chairman of the UC Berkeley center, told the Los Angeles Times, “This is a very big deal for low-wage workers in California, for their families and for their children.”
One thing is missing from this article. The expectation from management is this: if you were making $7.50/hour and now you are making $15/hour, you will be expected to do more.

And, oh, by the way, your social security tax and your income tax withholding will also increase. But, on paper, at least, you are making $15/hour.

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ObamaCare And Part-Time Work

We've blogged about this from the very beginning. Nice to see it's being validated.

From AEI:
And, we still think that the employer mandate to provide health insurance for full-time workers in the Affordable Care Act caused some of the increase in involuntary part-time work. …
In a note last year, we pointed out that the shift strikingly coincided with the passage of the Affordable Care Act (ACA), which included an employer mandate to provide health insurance to employees working 30 or more hours per week. As shown in Figure 3 at the link, passage of the ACA preceded a large and unprecedented shift from workers working more than 30 hours per week to just under 30 hours. We continue to believe that the ACA can explain a significant number of the “extra” involuntary part-time workers.

Minimizing Production -- April 22, 2016

In addition to DUCs and completed wells being taken off-line, we also have great wells that are being "shut-back" (or whatever word one uses). For example, note this great well:
  •  29060, 1,933, XTO, Amundson 34X-22C, Siverston, t7/15; cum 55K 2/16;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN2-20163119611375348560616893878
BAKKEN1-20161557386996272514131140780
BAKKEN12-2015311462014100320536158360820
BAKKEN11-201530155561537930183439133843481
BAKKEN10-20151892078627213236406339942344
BAKKEN9-20156336633843801828954992740
BAKKEN8-2015014220000
BAKKEN7-20158545750182657994627017184

Just one of many, many examples. I don't know if Lynn Helms consider wells like these part of the 1,500 wells estimated to be "inactive."

This obviously affects statistics in the Bakken across the board.

On Glide Path To Set New All-Time Daily Record For Gasoline Demand -- April 22, 2016

Tweeting now: With historically low gas prices, US gasoline demand in March was highest ever recorded for month.

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Flashback: the Red Queen

Link here: http://www.reuters.com/article/shale-output-northdakota-kemp-idUSL6N0UR2XA20150112.

Excerpts from the January 12, 2015, column:
 More than 22,000 wells have been drilled in North Dakota since oil was discovered in 1951, but over half of state production comes from around 4,000 wells drilled since the start of 2013.
By the end of Oct 2014, there were nearly 11,900 wells producing oil and gas in the state.
Of these producing wells, around 70 percent (8,400) are unconventional wells drilled into the Bakken and Three Forks formations, mostly since 2005, and they account for 95 percent of the state's current oil output.
The remaining 30 percent (3,500) are legacy wells, mostly from before 2005, but they account for just 5 percent of output.
In fact, an even smaller number of wells contribute the majority of output. The number of wells drilled into the Bakken has grown rapidly so the average well is just three years old.
While output is initially high it declines rapidly. The typical Bakken well produces around 1,000 barrels per day in its first 60 days, but output halves within the first six to nine months and continues to fall thereafter.
Just to keep output steady, the oil companies need to continue drilling a large number of new wells to replace fading output from existing ones.
The problem of decline rates and replacement drilling has been likened by many in the peak oil community to the "Red Queen's Race" in Lewis Carroll's "Through the Looking-Glass".
The Red Queen warns Alice: "It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that."
Peak oil experts have expressed fears that shale producers would have to employ ever more drilling rigs and bore ever more holes just to keep up with decline rates, and this would ultimately become unsustainable.
In practice, however, North Dakota's shale producers have been winning the race because they have been able increase productivity faster than output from old wells has declined.
Drilling crews have drilled faster and spent less time moving from one site to site and rigging up. The horizontal section of wells has grown longer and more fracturing stages have been performed on each well increasing output per well substantially.
Oil production depends on a broad constellation of factors including drilling efficiency, well productivity, decline rates and breakeven prices.
If the Red Queen's race can be won by productivity, it can be lost by low prices. If prices remain below breakeven rates, drilling will slow or stop, and decline rates on old wells become the primary drivers of future production. 
North Dakota needs between 140 and 155 active rigs to keep output steady throughout the next three years, according to a presentation on January 8, 2015, by the Department of Mineral Resources to legislators working on the state budget.There are signs this is already happening.  
The number of rigs operating in the state has fallen to 167, down from 183 at the same point last month and 193 in October. The number of operating rigs is likely to fall further in the coming months as crews come to the end of existing work programmes.
North Dakota oil production may yet fall over a cliff, but that article was written in January, 2015, and stated that 140 - 155 active rigs would be necessary to maintain output. There are 29 active rigs in North Dakota today; the big rigs (coming in after the initial spud) can reach total depth in about five days in experienced hands. When the boom began, we were talking upwards of 60 days to reach total depth. And time measured in weeks to get a rig from one site to the next.

It will be interesting to watch the progress of CLR's Tarentaise wells.

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Statoil's Skarston Wells
Banks Oil Field

Eight wells on an 8-well pad, "batch-drilled," spud date and TD dates:
  • 25854, SI/NC, Skarston 1-12 2TFH: 9/21/14; 11/12/14;
  • 25856, 3,645, Skarston 1-12 7H: 9/19/14; 12/01/14; t3/16; cum --
  • 25857, SI/NC, Skarston 1 -12 4H: 9/17/14; 12/08/14;
  • 25858, 5,010, Skarston 1-12 5H: 9/14/14; 2/14/15; t3/16; cum --
  • 25859, 3,802, Skarston 1-12 6TFH: 9/14/14; 2/25/15; t3/16; cum --
  • 25855, SI/NC, Skarston 1-12 3TFH: 9/10/14; 3/11/15;
  • 29563, SI/NC, Skarston 1-12 8TFH: 1/07/15; 2/5/15;
  • 29564, 3,583, Skarston XE 1H: 11/11/14; 4/14/15; t3/16; cum --
So, between 11/12/14 and 4/14/15: 8 wells on an 8-well pad drilled to depth. I assume they can be fracked within a couple of weeks, and oil in the national pipeline system within 30 days.

As of April, 2016: all on SI/NC status.

CLR's Tarentaise Wells -- CLR Has A Rig-On-Site (ROS)

Updates

March 25, 2018: early production numbers for the Tarentaise wells at this post.

Original Post
The wells:

Six-well pad sited in 19-153-94 (SWSW), sited north to south:
  • 32578, 1,768, CLR, Tarentaise Federal 6-19H1, Elm Tree, t11/17; cum 230K 6/19;
  • 32577, 2,051, CLR, Tarentaise Federal 5-19H, Elm Tree, t11/17; cum 283K 6/19;
  • 32576, A, CLR, Tarentaise Federal 4-19H2, Elm Tree, t--; cum 247K 6/19;
  • 32575, 2,414, CLR, Tarentaise Federal 3-19H, Elm Tree, t10/17; cum 260K 6/19;
  • 32574, 1,176, CLR, Tarentaise Federal 2-19H1, Elm Tree, 62 stages; 15.2 million lbs, mesh/large; 108K; t10/17; cum 261K 6/19; 
  • 32573, 2,010, CLR Tarentaise Federal 1-19H,  Elm Tree, 61 stages; 14.2 million lbs, mesh/large, 140K; t9/17; cum 374K 6/19;
Seven-well pad sited in 19-153-94 (SWNW), sited north to south:
  • 32588, 1,650, CLR, Tarentaise Federal 13-19H, Elm Tree, t11/17; cum 198K 6/19;
  • 32587, 1,582, CLR, Tarentaise Federal 12-19H2, Elm Tree, t11/17; cum 235K 6/19;
  • 32586, 1,840, CLR, Tarentaise Federal 11-19H, Elm Tree, t11/17; cum 309K 6/19;
  • 32585, 1,620, CLR, Tarentaise Federal 10-19H1, Elm Tree, t11/17; cum 242K 6/19;
  • 32584, 1,600, CLR, Tarentaise Federal 9-19H, Elm Tree, t11/17; cum 297K 6/19;
  • 32583, 1,544, CLR, Tarentaise Federal 8-19H2, Elm Tree, t11/17; cum 230K 6/19;
  • 32582, 1,620, CLR, Tarentaise Federal 7-19H, Elm Tree, t11/17; cum 242K 6/19;
Neighboring well impacted by these Tarentaise wells:
  • 19397, 417, CLR, Buelingo 1-20H, Elm Tree, t3/11; cum 317K 6/19; full production profile at this post; huge halo effect;
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Tarantaise Cattle

From okstate.edu:
We North Americans get excited about Tarentaise because to us they are a new breed, generally unrelated to existing breeds, which gives us that extra kick of hybrid vigor. Fact is, the breed was named in 1859, and the first breed congress was held in 1866. The Tarentaise herdbook was founded in 1888, with major revisions being made immediately following World War II.
Tarentaise bear the name of the place of their origin, the Tarentaise Valley in the French Alpine mountains. There has been less mixing of breeds with Tarentaise in the last 100 years than with most French breeds. What other breed that offers hybrid vigor has such pristine genetics, selected over the span of a century?
The Europeans selected primarily for milk production when making their breeding decisions. Mother Nature, on the other hand, selected for muscling, hardiness and adaptability in order for them to live under range conditions in the French Alps. The result is a dual purpose breed.
Altitude in their native region varies from 1,000 feet to 8,000 feet, and usually the change in elevation is dramatic. In order to negotiate the mountain ranges, Tarentaise developed excellent natural muscling. This breed is distinctive for its abundant muscling in the hip region, and they are exceptionally long from hooks to pins.
In France, no other cattle graze where the Tarentaise graze. Charolais, Maine-Anjou and Limousin are raised in Basin regions, where the land is more lush. Salers are native to a mountainous region, but it is not as mountainous as the home of the Tarentaise.
Cattle trivia, from an earlier post.
Cattle trivia, from another post.
And even more cattle trivia, from yet another post.

Katie Ledecky On The List With Pope Francis, Mohammed Bin Nayef, Tim Cook -- April 22, 2016; Sacagawea By A Landslide

One last article before I go biking: a contrarian suggests oil at $85 by the end of the year. A reader sent me that link just before I was getting ready to go out for the day. My reply to the reader:
As you know, the Saudis based their budget on $60 oil for calendar year 2016 (that budget would have been set back in 2015). I've run the numbers several times, and the only way we get to $60 oil as an average for the year is getting to $80 by the end of summer and then holding through the rest of the year.
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Active rigs:


4/22/201604/22/201504/22/201404/22/201304/22/2012
Active Rigs2988187186210

RBN Energy: impact of the current natural gas storage surplus on summer prices.

Schlumberger cuts another 2,000 jobs; full-scale industry meltdown. Link here

Sears to close another 78 stores. Link here.

Norfolk Southern reports surprise profit. Link here. Norfolk Southern Corp. on Thursday reported a surprise 25% profit jump in the first quarter, less than two weeks after Canadian Pacific Railway Ltd. abandoned its nearly $30 billion pursuit of the rail transportation company.

Sun Edison finally files for bankruptcy protection. Reuters is reporting

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The Katie Ledecky Page

Katie Ledecky is the youngest person on the Time 100 list of world's most influential people. Link here at nbcolympics.
Katie Ledecky is the youngest person named to the Time 100 list of most influential people in the world, joining the largest contingent of Olympians since the list's 2004 debut. The other "titans" Ledecky was grouped with include notable names like Priscilla Chan and Mark Zuckerberg, Dwayne Johnson and Pope Francis.
"I never thought I would see one person win the 200m, 400m, 800m and 1500m freestyle in the same World Championships, which is exactly what Katie did last summer," four-time Olympic gold medalist Janet Evans wrote in her piece on Ledecky, referencing what later became known as the "Ledecky slam." "And even more impressive, she did it as an 18-year-old."
Note the sponsor in the photo at this link; pretty nice. Katie Ledecky named to Time magazine's "most influential people," where she joins Tim Cook (Apple) for this prestigious honor.

Time divides the 100 into five groups: pioneers (e.g., Caitlyn Jenner); Titans (e.g., Tim Cook and Pope Francis); artists (e.g., Mark Rylance, VEEP); leaders (e.g., Vladimir Putin); and, icons (e.g. Jordan Spieth and Leonardo DiCaprio).

Amazingly, and appropriately, Katie is a TITAN. In Game of Thrones, Titans are at the top. By the way, did you notice that Prince did not make the list of icons -- the list was developed well before his death was announced.

Look at the full list (at the last link) and note the folks who did not make the list, but Katie did. That's what is most impressive. There are very few athletes on the list, including Stephen Curry, Jordan Spieth, and the Rock. DiCaprio made the list but George did not. Cruz made the list but the GOP front runner did not. This will make my wife furious: Lester Holt made the list; David Muir did not -- I agree that Lester Holt is the correct pick. The smartest woman on talk television, Rachel, did not make the cut, nor did many western European leaders (one exception: Hollande).

Most surprisingly, Barack Obama did not make the list. That speaks volumes. Vladimir Putin did.

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The Literature Page

Book review in The Wall Street Journal, April 21, 2016, Ghetto by Mitchell Duneier, c. 2016. The review begins:
This year marks the 500th anniversary of the creation of the world’s first ghetto.
In March 1516, Venice’s Christian authorities created a segregated neighborhood where Jews were locked up at night and strictly controlled in their movements by day. The area chosen was a disused metal foundry, called in Italian a getto, which gave its name to one of the modern world’s most notorious urban spaces.
The anniversary provides added poignancy to Mitchell Duneier’s brilliant “Ghetto: The Invention of a Place, the History of an Idea,” which, as its title suggests, traces the history of this most complex and divisive of terms all the way from 16th-century Venice to 20th- and 21st-century urban ghettos in Chicago and Harlem. The ghetto’s story is a largely unedifying history of humanity’s ability to separate and demonize others based on religion and race, and Mr. Duneier recounts it with admirable tact and sensitivity.
He points out that the early ghettos in Italy, especially the first Venetian example, allowed Jewish culture a certain internal autonomy that enabled it to flourish within prescribed limits and also offered a safe haven from the endemic persecution and pogroms that regularly swept late medieval and Renaissance Europe.
As the ghettos began to fall in the 19th-century era of emancipation, the definition of the ghetto began to shift. No longer simply a place of enforced residence, it became a high-density urban neighborhood inhabited voluntarily mainly by Jews in cities like Warsaw and Vienna and by immigrants and African-Americans in emerging U.S. metropolises like New York and Chicago, where it became forever associated with the concept of the “slum.”
From page 58 and page 69, Henry Neville and the Shakespeare Code, Brenda James, c. 2008:
Neville was an international trader: this is reflected in The Merchant of Venice and The Comedy of Errors. He e resided on the Continent (1578 - 1583) .... and had overwhelming reasons during those years to visit the Jewish Ghetto in Venice ...
Neville's visit to Venice if of particular interest. At the time, the city contained the world's first Jewish ghetto, and it is the origin of the word "ghetto" which affords a particular pointer to Sir Henry Neville's authorship of the plays. "Ghetto" comes from the Italian 'to throw' or 'to cast,' and it was so called because the area of the city known as the Ghetto was where the old bronze cannons were cast. Eventually, it became the area for making iron cannons, too, so Neville certainly had reason to visit the area. German Jewish workers were imported there because they were already skilled in all kinds of metalwork. In The Merchant of Venice, Shylock actually mentions his German origins.
Neville would not have been allowed to visit the latest Venetian arms' centre. That was the Arsenale, and forbidden to foreigners. So he would have definitely gone to seek out what memories remained of the older works, and this meant visiting the Jewish quarter of Venice. No other authorship contender had reason to do this. 
And that's just the beginning.

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Closing Out The Poll ...

... in which we asked, who among the following, would you have preferred on the $20 bill?
  • Abigail Adams: 4%
  • Clara Barton: 4%
  • Amelia Earhart: 20%
  • Helen Keller: 15%
  • Eleanor Roosevelt: 9%
  • Sacagawea: 49%
It's hard not to agree with a Native American on the $20 bill.