Saturday, October 29, 2016

Sedalia Energy Drilling Two New Laterals In An Existing Madison Well 20 Miles Northeast Of Minot -- October 29, 2016

Updates

December 20, 2017: this well, and I assume many others in the area, were transferred to Murex Petroleum this data; 

April 23, 2017: update; water production, after dropping significantly, is now back up. 

February 4, 2017: update on the Madison horizontal, Pratt Madison Unit 1H (are these oil wells or "water wells"? Look at all the water).
  • 29854, 320, Murex/Sedalia Energy, Pratt Madison Unit 1H, Pratt oil field, t12/24/14; cum 50K 1/17; total depth, 8,041 feet; acres in drilling unit, 1,002; target objective Glenburn 1B; this well is in Pratt oil field, a few miles east-northeast of the Glenburn oil field, which in turn is northeast of Minot; well outside the Bakken.
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
MADISON2-2017283739383219151000
MADISON1-201731453944375447000
MADISON12-2016314444448720888000
MADISON11-20161210507909878000
MADISON10-20160000000
MADISON9-2016001250000
MADISON8-2016197388035077000
MADISON7-201631119711888672000
MADISON6-201630119211658660000
MADISON5-201631133513198868000
MADISON4-201630135614338572000
MADISON3-201631131712716767000
MADISON2-201629140513306437000
MADISON1-201631148014656147000
MADISON12-201531142014547828000
MADISON11-201530163316577604000
MADISON10-201530174817908191000
MADISON9-201530178017357641000
MADISON8-201531180619167763000
MADISON7-2015312253218410630000
MADISON6-2015242114214710105000
MADISON5-2015312447248410324000
MADISON4-201530261425229962000
MADISON3-2015312822284210036000
MADISON2-201528291329657135000
MADISON1-201531389641140000
MADISON12-2014102348190110831000

The graphic:
 




December 9, 2016: Production is reported from the first lateral. The well was taken off-line in mid-August, 2016. The NDIC map shows a rig on the pad for #29854.



It's Madison Time


Original Post

Sedalia Energy Drilling Two Additional Laterals In An Existing Madison Well

This is interesting. There is a rig on this pad according to the NDIC GIS map server:
  • 29854, 320, Sedalia Energy, Pratt Madison Unit 1H, Pratt Oil Field, t12/14; cum 40K 8/16; bottom hole location is in the southeast corner of section 32-159-80.
This is a fairly nondescript Madison well, that is well east of the Bakken, about 21 miles northeast of Minot, ND.

According to a sundry form received August 10, 2016:
Sedalia Energy plans to drill two new laterals in the PMU 1H.

Lateral #2 will be an open hole sidetrack of the original lateral...will follow the Glenburn pay zone to a measured depth of +/- 7,465 feet with an estimated TVD of 4,229 feet. The bottom hole location will be in section 5.

Lateral #3 will be an open hole sidetrack of the original lateral...will follow the Glenburn pay zone to a measured depth of +/- 8,384 feet' with an estimated TVD of 4,234 feet. The bottom hole location will be in section 32. 
*******************************
  World Series
Game 4
Cleveland Leads Series 3 -1 

Cleveland up 3 - 1 early in the game. At the top of the 4th, Cleveland adds another, now 4 - 1.Wow, the Indians "bust it open" in the top of the 7th inning -- 3-run homer, now 7 - 1, top of the seventh, no outs. Phenomenal. First time anyone has hit a 3-run homer in the World Series since Babe Ruth. Wow.

**************************
College Football 

Wow, wow, wow .. Texas (unranked) just beat Baylor (ranked #8), 35 - 34.

Another Open-Book Test For Energy Investors -- 2020 Is Only Four Years From Now -- October 29, 2016

A couple of days ago I posted this little gem:
Watch the price of gasoline in November: indications suggest the price of gasoline could spike in Europe in November, 2016.
Now, yesterday this story over at Platts:
Global gasoline demand will rise as long as crude stays below $60/b, and a shortage of Asian gasoline refining capacity will drive US exports higher, [according to an analyst].
"Any way that we look at the future refineries under construction [in Asia], they cannot produce enough gasoline." Fesharaki expects US net exports of refined products to keep rising.
Cool, huh?

Other data points in the Platts article:
  • in one decade, the US has made a dramatic swing from 3.9 million b/d of net imports to 2.3 million b/d in net exports (July, 2016) -- insert "Bakken" or "shale revolution" here
  • this was the decade in which Obama famously said, "we can't just drill our way to lower prices" 
  • as time goes by, there is a gasoline shortage worldwide that only US refiners can supply -- analyst
  • expect huge amounts of exports of US gasoline to all over Asia, without which Asia cannot balance its system
  • in addition, ocean-going tankers must reduce sulfur-containing fuel
Now get this -- that last bullet, regarding ocean-going shippers (you will see this posted again):
  • currently, ocean-going tankers bunker 4 million b/d, which is using 3.5% to 4% sulfur fuel oil
  • "If God almighty comes from the heavens, He cannot make 0.5% fuel oil by 2020" -- analyst
  • thus: cheating, rampant noncompliance, use of US LNG for bunkering and blended diesel
  • the price of fuel oil will collapse and refinery economics will go through the roof


Is this an open book test for investors or what?

Saudi Arabia has announced plans for new refineries; the only question is whether they will locate those refineries in Saudi Arabia (lack of skilled labor force); Europe (unlikely); Asia (possibly); along the Texas/Louisiana coast (very likely).

With regard to fuel oil, by the way, it will be interesting to read the tea leaves -- New England -- fuel oil or natural gas?

***********************************
A Note For The Granddaughters

This has been quite a day for the oldest granddaughter, Arianna, age 13.

Last year she was the only flutist in her symphonics band to audition for honors band, and she made it. She plays second chair in honors band.

Today, she auditioned for District Band, and she made it. A huge honor. This is really quite exciting for an eighth grader in her last year at middle school before moving to high school next year.

Now, she is playing water polo in Denton, TX, at a north Texas water polo tournament. Hoo-ahh!

About That Revised 3Q16 GDP -- October 29, 2016

USC-LA Times Poll -- October 29, 2016

FBI Director Comey announced Clinton e-mail investigation re-opened one day earlier.

Unlikely that this poll reflects most recent news about Clinton e-mail scandal.


*******************************
GDP

Yesterday, the Obama administration announced that the US economy grew 2.9% in 3Q16, the fastest rate in two years.

It's hard for me to believe that bureaucrats can't fudge the data to get any number they are told. Had they been told to come up with 3.2%, they would have. I have no doubt.

So the question is not how do they arrive at 2.9% but rather, "how did they arrive at the decision to make 2.9% the target?"

The administration wanted a 3.0% or better revision but the bureaucrats knew that a 3.0% would not be credible. The GDP can't be an "even-3.0." So, it's either some number below 3 or some number above 3.

Below 3, the president is not happy, but at least Wall Street will "trust" the number, as will gullible Americans, like me. Above 3%, the president will be ecstatic (but he's gone in 80 days anyway) and there's no way Wall Street will believe a number greater than 3.0%, although, again, most gullible Americans, including me, would believe anything up to and including 3.9%.

So, the "deciders" said, "We'll go with 2.9%. It's almost enough to make the president happy and Wall Street will believe that number." To wit:
“This is a good, solid number,” said Gus Faucher, deputy chief economist at PNC Financial Services in Pittsburgh. “The economy is growing at a decent clip. Consumer spending will continue to lead growth, and the fundamentals there remain positive.”
And:
While the pace of economic growth in the third quarter fell well short of previous achievements, the latest data represented a significant improvement from the first half of 2016 and the best quarterly advance in two years.
Economists also said the gains were probably strong enough to reassure Federal Reserve policy makers that it was safe to raise the benchmark interest rate when they meet in December.
Short history:
As recently as October 18, 2016, the Federal Reserve Bank in Atlanta, GA, using real numbers and real formulas, calculated that the 3Q16 GDP would be 1.9%.  To get from 1.9% to 2.9% is quite an achievement -- in less than two weeks, using almost the same numbers.
The day before the Obama administration announced the 2.9% GDP revision, the Federal Reserve Bank in Atlanta, GA, forecast 2.1%, in line with what they had been predicting:
Latest forecast: 2.1 percent — October 27, 2016.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 2.1 percent on October 27, up from 2.0 percent on October 19.
The forecast of the contribution of net exports to third-quarter real GDP growth increased from -0.15 percentage points to 0.07 percentage points after yesterday's Advance Economic Indicators release from the U.S. Census Bureau.
This was partly offset by a decline in the forecast of the contribution of inventory investment to third-quarter real GDP growth from 0.23 percentage points to 0.03 percentage points after the Census Bureau's Advance Economic Indicators release and its advance durable manufacturing report this morning.
In one day, the estimate jumps from 2.1% to 2.9%. In less than two weeks, it jumped from 2.0% to 2.9%.
  • 2.9 - 2.0 = 0.9
  • 0.9/2.0 = 0.45
So, in less than two weeks, using pretty much the same numbers, the Obama number jumps 45% from the Federal Reserve Bank's number in Atlanta, GA.

In one day, it jumped 38%. The bureaucrat who figured that out is due for a huge end-of-the-year bonus. 

Probably just one of those things.

*********************************
Comey

Updates

November 2, 2016: "intent to obstruct"? Huma had four e-mail accounts
Abedin was questioned by FBI agents and Justice Department officials, including those involved with counterintelligence matters, on April 5, 2016.
During those discussions, Abedin revealed that she used four different email accounts while she was deputy chief of staff for operations in Clinton’s seventh floor office at the State Department.
The email accounts included her official State Department account, 1) abedinh@state.gov; 2) the private server account, huma@clintonemail.com; and, 3) her private email, humamabedin@yahoo.com. Abedin’s fourth email account was associated with the campaign activities of her estranged husband, former Democratic congressman Anthony Weiner. 
Later, 2:53 p.m. Central Time: when one reads The New York Times story on the relationship among Huma Abedin, Anthony Weiner, and Hillary (which was posted about 7 minutes ago) the writer comes incredibly close to using the French phrase ménage à trois. Early in the series, House of Cards, there was a ménage à trois among husband and wife (protagonists of the show) and a Secret Service agent. It is well know that the writers of this Netflix series got their inspiration from the Clintons (if that's the correct idiom). When asked about the content of the show, whether it was credible, sometimes seeming to have gone too far out on a limb, the writers have been known to answer that if they wrote what they really knew was going on in Washington, no one would "believe" the show.

Later, 2:37 p.m. Central Time: this is the headline over at The Los Angeles Times -- "FBI says e-mails found in Anthony Weiner's sexting scandal may have links to Clinton probe." Okay, for those who are under the Geico Rock, let's review: Hillary Clinton has been under suspicion, like, forever. She was the target of an FBI investigation, for, perhaps a year. Her closest aide, confidant, friend, and vice chairman of Clinton's presidential campaign was Huma Abedin. Huma is married to, now separated from, Mr Weiner. And now, two weeks before the election, the FBI tells us they found e-mails in Weiner's sexting scandal that may have links to the Clinton probe. What in the world was the FBI doing for a full year investigating Ms Clinton's e-mails and private servers? Apparently not looking at e-mail from her closest aide, confidant, and friend -- or not looking very closely.

Later, 1:03 p.m. Central Time: literally less than an hour after I wrote the original post below, I went to Drudge; he had posted a number of new banner headlines. Most surprising was a link to one of Clinton's press agents: The New Yorker. The last two paragraphs of the article by Jane Mayer, a New Yorker staff writer since 1995:
In a letter to F.B.I. employees sent soon after the letter to Congress, Comey tried to explain his unusual decisions. In the letter, which was obtained by the Washington Post, he acknowledged, “Of course, we don’t ordinarily tell Congress about ongoing investigations, but here I feel an obligation to do so given that I testified repeatedly in recent months that our investigation was completed. I also think it would be misleading to the American people were we not to supplement the record. At the same time, however, given that we don’t know the significance of this newly discovered collection of emails, I don’t want to create a misleading impression. In trying to strike that balance, in a brief letter and in the middle of an election season,” he noted, “there is significant risk of being misunderstood.”
“I don’t really blame Comey,” another former Justice Department official said. “But it’s troubling.”
This official thought that Comey “didn’t want to look tainted. This new information comes to him, and he’s afraid if he doesn’t make it public until after the election he’ll be impeached. People will say he lied to Congress. But in the end he did the self-protective thing. Was it the right thing? Put it this way: it isn’t what previous Administrations have done.”
Many, many comments could be made on those two paragraphs. Most troubling is a journalist who feels that "cover-ups of past administrations" justify "cover-ups by the present administration." At least that's how I read her last three sentences.

"Didn't want to look tainted." "Didn't want to be indicted for conspiracy" is how I read it. Another way to read this: "Do I really want to be the first FBI Director to go to prison for conspiracy?"

My hunch: an in-house FBI lawyer went to Comey and said: "We either tell Congress ourselves that the Weiner investigation has led us back to Ms Clinton, or we wait for someone to leak that fact. Or it comes out after the election and we now find ourselves defending an obstruction of justice suit." At least that's my hunch. Which may change as more facts come out.

The Bernstein hunch: if what the FBI found among Weiner's and Huma's e-mail was simply "more of the same" with regard to Ms Clinton, Comey would not have sent the letter that he did to Congress. The investigation of Mr Weiner and Ms Abedin would have continued but no need to "go back" to Ms Clinton; that ground had already been plowed during a 3 1/2 hour interview. Bernstein: there must have been a "bombshell" in Mr Weiner's or Huma's e-mail exchanges. 

Original Post

My hunch: evidence of conspiracy to obstruct justice. That's pretty much a given. The "fun" is listening to the talk at the deli about who were involved in the conspiracy. The list of "usual suspects" is quite long.

Week 43: October 23, 2016 -- October 29, 2016

Another week of earnings reports and surprises. Of the majors, it looks like analysts are giving COP the benefit of the doubt, but wow, Exxon could be in a bit of trouble, as they get ready to write down their reserves. Chevron was the big surprise -- even increasing their dividend.

Whiting proved they were right that they could make money on $25 oil, or whatever price it was they said or what they were rumored to have said. I think I heard some rumors that down to $20 Whiting could make money. That was over a year ago, now.

On the international radar scope, it is clear that OPEC will be unable to make any meaningful cuts in production. The only OPEC country that could still announce some kind of cut is Saudi Arabia, but none of the others will. Maybe they will do it like the courts do it here in America: find someone guilty, sentence him to ten years in prison, allow for time already served, and then suspend the sentence. OPEC could do the same: announce a cut of "x" percent and then suspend the announced cut until the next meeting. Whatever. But at $49 oil, Saudi remains in a heap of trouble.

Speaking of "heap" of trouble, a note about Standing Rock Reservation. In general, and with very few exceptions, I won't blog about the DAPL and the protest in North Dakota, but I am following it to some extent -- a very limited extent. There's an article in today's Bismarck paper suggesting that the reservation is facing huge financial problems of their own (it looks like they are about ready to cave without more Hollywood financial support) and some of the folks are just now realizing winter is about to set in. I don't think folks who have never been to North Dakota in general, or to this part of North Dakota, in particular, can fathom how miserable next month is going to be for the protesters. And November is mild compared to February, three months later. Living in teepees or tipis off the reservation for the next six months -- wow, a great documentary for National Geographic or photo spread in Vanity Fair. This is an incredibly remote, desolate area of North Dakota -- even for North Dakota. There is nothing out there. I drove through the area earlier this year -- not even aware that DAPL was going to be an issue -- and even after growing up in North Dakota, I was surprised how remote this area was. It was absolutely beautiful; the scenery was incredible. But almost no sign of civilization. One gas station. Great location for a mega wind-farm. Whatever.

The most non-Bakken fun I've had on the blog, I suppose, is tracking the Northern Fleet on its way to Syria. The last signal/update was 22 hours ago. If the tug did not linger for some reason, the fleet should be north of Algiers by now.

Back to the Bakken. There are more and more signs that we are in the early stages of Bakken 2.0.

I started blogging about Bakken 2.0 about two weeks ago, and this past week Lynn Helms of the NDIC, without using that exact term, suggested the same thing. Even the Oil & Gas Journal picked up on it.

Bakken 2.0 -- Active Rigs
Up to 36
Number of active rigs rising slowly in North Dakota

Noticed by the Oil & Gas Journal

Bakken 2.0 -- Multi-Well Mega-Pad Development
CLR's proposed ten-well Bailey/Wiley pad in Pershing oil field
CLR's proposed thirteen-plus Sakakawea Federal pad in Elm Tree oil field

Bakken 2.0 -- Mega-Fracks
Random update on MRO's mega-fracks  

Bakken 2.0 -- Permits Renewed
Twelve permits renewed
Twenty-four permits renewed; thirteen new permits
Thirty-four permits renewed; fourteen new permits 

Bakken 2.0 -- New Operators
Petro-Sentinel (although probably not drilling Bakken wells) 
CLR transfers 67 wells to Kraken Operating 

Bakken 2.0 -- Increased Bakken Production
Hess set to increase producing in the Bakken in 2017
31% production increase, average EURs of almost 1 million boe; consistent production increase regardless of fracking intervals

Bakken 2.0 -- Increased EURs
Hess raises average EURs to one million boe for wells drilled in 4Q16

Bakken 2.0 -- DUCs Being Completed
Seven DUCs reported as being completed 

Bakken 2.0 -- Deals
Forbes talks about the SM Energy - Oasis deal in the Bakken

Bakken 2.0 -- Plans
Williston / Williams County begin open comment "season" on comprehensive plans for city and county  

Operations
Of all the operators in the Bakken, Halcon continues to report some of the best wells based on IPs; one example here
Number of potential Whiting drill sites probably under-estimated
Is the shale honeymoon over for PADD 1 (east coast) refineries?

Bakken Economy
Williston State College extends free college to several more counties in Montana, North Dakota
Western Area Water Supply Authority -- a huge success story -- celebrates its fifth anniversary