Friday, August 11, 2017

Week 32: August 6, 2017 -- August 12, 2017

Operations
North Dakota crude oil production still over one million bopd -- June, 2017, data
Highlights from CLR's investor update
CLR's 2Q17 earnings

Bakken economy
Bakken traded higher than WTI this past week 
US states' fiscal health: North Dakota #2, behind Florida 
Legacy Fund update 

Bakken 2.0
Seventeen permits renewed 
Jump in production in XTO's Rink 

Commentary
The Bakken was a hard nut to crack

Some New Activity In The Nesson Anticline Near The Canadian Border? -- August 11, 2017

For newbies and old-hands, take a look at the map at this post, and specifically, area designated as #3 -- the Nesson Anticline: a vertical rectangle, six miles on either side of the city of Tioga, extending south to the river and north towards Canada, but probably not including most of Divide or Burke counties; Hess and many other operators.

Here, also:


A reader alerts me that he has been approached by a landman for a new lease a few miles east of Crosby.

The reader suggests I take a look at this well:
  • 25959, 732, CLR, Haffner 1-31H, Noonan, t3/14; cum 151K 7/17; 


Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-201730178219102448413904139
BAKKEN5-201731180917102647418104181
BAKKEN4-201730189717753089443004430
BAKKEN3-201730191921043155437104371
BAKKEN2-201728173817012845396203962
BAKKEN1-201731192924223196443104431
BAKKEN12-201631192314613268436804368
BAKKEN11-201630173216463172393803938
BAKKEN10-201631210021493688467904679
BAKKEN9-201630209421443706480804808
BAKKEN8-201631207918943530490824022506
BAKKEN7-201631234123763068552955290
BAKKEN6-201630226823262762317013721798
BAKKEN5-201630236623292956260902609
BAKKEN4-201630239223792907261702617
BAKKEN3-201631260226093277279202792
BAKKEN2-201629248226282682268602686
BAKKEN1-201631275428903324361219821630
BAKKEN12-2015312797265037013988389098
BAKKEN11-201530297430343754422742270
BAKKEN10-201531309230853914396439640
BAKKEN9-201530297327562246355322111342
BAKKEN8-20153134883758236541603316844
BAKKEN7-201530333334552791344820471401
BAKKEN6-201513165316002322150115010
BAKKEN5-2015302970274833753640354397
BAKKEN4-20153033563270290338833600283
BAKKEN3-20153139374342404555185307211
BAKKEN2-20152837943471437949684838130
BAKKEN1-20153147455129458655505374176
BAKKEN12-20142545864331585041983974224
BAKKEN11-2014305522576879026022594082
BAKKEN10-2014112190181028121538880658
BAKKEN9-201423331134695307431324821831
BAKKEN8-2014316690717299421281868965922
BAKKEN7-2014301115310637154472108634020746
BAKKEN6-20142513703139961616417444017444
BAKKEN5-20142016874172682031115259015259
BAKKEN4-2014125378522310179541005410
BAKKEN3-2014164228359211698502105021
BAKKEN2-201442320717742042
BAKKEN1-2014000000

Peak Oil? What Peak Oil? -- August 11, 2017


Eleven New Permits; Four DUCs Completed -- August 11, 2017

Active rigs:

$48.798/11/201708/11/201608/11/201508/11/201408/11/2013
Active Rigs573370194184

Eleven (11) new permits:
  • Operators: Crescent Point Energy (7); Newfield (4)
  • Fields: Lone Tree Lake (Williams); Keene (McKenzie)
  • Comments: Crescent Point has permits for 11 wells in SWSE 20-157-99; Newfield has permits for 4 wells in SWSE 23-153-96
NDIC did not report any wells coming off the confidential list today.

Four producing wells (DUCs) were reported as completed:
  • 31973, 1,613, Statoil, Lougheed 2-11 8TFH, Todd, t7/17; cum --
  • 31997, 332, Hess, CA-Stangeland-155-95-2128H-9, Capa, t7/17; cum --
  • 32741, 397, Hess, HA-Grimestad-152-95-3031H-7, Hawkeye, t7/17; cum --
  • 32721, 576, BR, Remington 3C MBH, Blue Buttes, t7/17; cum --

America, Making Europe Great Again -- August 11, 2017

Updates

August 12, 2017: so, how much "hospital" can one get for $1 billion?

Original Post 
From The Wall Street Journal:
On the outskirts of this small town in southern Germany, the U.S. is spending $1 billion on a hospital an Army general describes as the most ambitious medical construction project the military has ever undertaken.
The excavators rumbling across an expanse of red soil close to the size of 90 football fields send a message, U.S. military officials say: Europe is a vital ally, even in the age of “America First.”
“My grandma used to say, ‘You don’t remodel unless you intend on staying,’” Brig. Gen. Dennis LeMaster, the top U.S. Army medical official in Europe, said in an interview on a nearby U.S. base. “You know, words whisper—actions thunder.”
President Donald Trump’s evolving rhetoric about how he views the North Atlantic Treaty Organization has left Europeans confused over whether the U.S. military remains as committed to Europe as it has been in past decades.
U.S. officials have told allies that it is America’s deeds they should focus on. Construction on the Weilerbach hospital began in 2014, and has continued since Mr. Trump’s election. Now Mr. Trump wants to spend even more on Europe.

Director's Cut -- June, 2017, Data

From The Director's Cut
June, 2017, Data

From Reuters: ND oil production slips about 1% in June. Or they could have said, ND production slipped less than 1% in June.
North Dakota's oil output slipped about 1 percent in June but should remain above 1 million barrels per day for the foreseeable future.
The optimistic outlook comes as the state's shale producers have found a way to survive low oil prices with new technology and process improvements.
North Dakota, the No. 2 U.S. oil-producing state, has largely taken a back seat in the past year as companies in the Permian Basin of Texas and New Mexico - the largest U.S. oilfield - battle with the Organization of the Petroleum Exporting Countries for global energy market dominance.
Link here.

The usual disclaimer applies.

Oil production
Producing wells:
Permitting
  • June, 2017: 109
  • May, 2017: 100
Oil price:
  • today: $38.25
  • July:$35.83
  • June: $34.72
  • May: $37.85
Rig count:
  • today: 57
  • July: 58
  • June: 55
  • May: 50
Wells not producing:
  • waiting on completion: pending; 865; up 35 from the end of May to the end of June
  • estimated inactive well count: 1,458; down 53 from the end of May to the end of June
Takeaway capacity:
  • June data: including CBR to coastal refineries is more than adequate
  • May data: including CBR to coastal refineries is more than adequate (major change in verbiage)
Natural gas capture:
  • statewide: 88%
  • FBIR: 79%
  • goal: 88% through October 31, 2020; then 91%
  • comment: the trend continues -- large amount of flaring on BLM land

OPEC Compliance At 114%? Maybe Not -- August 11, 2017

Warning! A snarky post.

I know I'm wrong, but it was my impression, based on tweets and articles by John Kemp, Reuter's London-based oil analyst-journalist, that OPEC compliance was well above 100% -- as high as 114%.

Today, this over at Twitter:



My bad: it was Platts:
Platts says "not including Libya and Nigeria, compliance among OPEC's 12 members ...remains robust at 114%, down slightly from 116% in June, based on an average of January through July output."

Compliance is 114% but yet OPEC production "hits high of 32.82 million bopd." Okay.


For The Archives -- The Beginning Of The End For The Bakken -- Art Berman -- August 11, 2017

Updates

July 15, 2018: I provide updates for this story at this post.

Original Post

For the archives.

I recall seeing this article when it was first posted some time ago, but elected not to post it. A reader recently referenced it so I thought it best to post the link for archival purposes.

This is Art Berman suggesting that data in December, 2016, suggested that we were seeing the "beginning of the end" for the Bakken. The article begins:
It’s the beginning of the end for the Bakken Shale play.

The decline in Bakken oil production that started in January 2015 is probably not reversible. New well performance has deteriorated, gas-oil ratios have increased and water cuts are rising. Much of the reservoir energy from gas expansion is depleted and decline rates should accelerate. More drilling may increase daily output for awhile but won’t resolve the underlying problem of poorer well performance and declining per-well reserves.

December 2016 production fell 92,000 barrels per day (b/d)–a whopping 9% single-month drop. Over the past two years, output has fallen 285,000 b/d (23%). This was despite an increase in the number of producing wells that reached an all-time high of 13,520 in November. That number fell by 183 wells in December.
Perhaps he mentioned it, but if so, I missed it:
  • an emphasis that this was December data (winters can be tough in North Dakota); and,
  • the Saudi surge had resulted in huge drop in price of WTI
I think the article or variations of the article have appeared elsewhere.

Art Berman is a proponent of peak oil.

The NDIC Director's Cut is scheduled to come out today. It will be interesting to see where the Bakken is today. [Update: June data released in the Director's Cut today.]

**************************************
Echo Beach

Such a depressing story (the Art Berman story above). Time for some music. Art Berman caught in his own echo chamber?

Echo Beach, Martha and the Muffins

Why the Muffins, you ask? Probably because all the animal and insect names had been taken. 

A Shout-Out To Another Blogger -- August 11, 2017; More Bad News For OPEC; Sanctions? What Sanctions?

A shout-out to OutrunChange -- recently linked one of my posts. Thank you. Have a great weekend.

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The Market And Energy Page, Part 2, T+203

Wow! Completely unexpected: Reuters is reporting that a "flood" of gasoline is heading to the US Northeast as driving season ends; gasoline coming from Europe and the US Gulf Coast

A string of inventory draws in the United States and a revival in gasoline demand alleviated a longstanding glut in the New York gasoline hub, drawing interest from shippers in Europe at a time when buying historically eases at the end of August.

Expectation for increased flows pushed gasoline futures and margins to a two-week low after they surged last week to a more than three-month high.

European exports to North America of gasoline and naphtha, which is used for blending into gasoline, will jump in the coming weeks to the highest in months.

Total East Coast imports are set to reach nearly 850,000 barrels per day (bpd) by the end of August, doubling from a month earlier, according to traders and shipping data.
See related post from yesterday: the nation's biggest fuel pipeline is back in business -- but still not big enough. Making America great again. Who would have ever guessed. I thought Tesla had killed the internal combustion engine.

Speaking of Tesla: lack of "ethical cobalt" undermines Tesla debt issue. -- Financial Times. Tesla and "colonial slaves?"

Russian sanctions? Apparently not when a country needs Russian natural gas. Russian gas producer Gazprom said it used the Opal pipeline to full capacity on Wednesday for the first time since a German court lifted a restriction on the company's access last month.

OPEC: more challenges -- Rigzone is reporting that the IEA has now cut its estimates for the amount of crude oil needed from OPEC in 2017 and 2018. No link yet; just being posted on Twitter. 

Another wow! Has anyone noticed that 10-year Treasuries are down to 2.196% -- at least that's what I'm seeing on the CNBC crawler. And there's an "up" arrow suggesting it was even worse, earlier. Wow. I know nothing about Treasuries but Rick Santelli feels strongly that going through the 3% floor was not trivial. I would assume that banks are going to be making a ton of money when they can borrow cheap money and loan it out at higher rates. I don't know; just idle chatter. 

NDIC Hearing Dockets, August, 2017 -- Highlights

***********************************
Disclaimer 
 
Disclaimer: as usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Full Agenda

The usual disclaimer holds

Wednesday, August 23, 2017

26014, NDIC to consider confiscation of assets at Savelkou 7-21, #24147, operated by Strike Oil, Renville County
26015, NDIC to consider confiscation of assets at Artz 22-42, #17606, operated by Strike Oil, Bottineau County
26016, NDIC to consider confiscation of assets at Artz 15-13, #17632, operated by Strike Oil, Bottineau County
26017, NDIC to consider confiscation of assets at North Dakota State 36-12, , #21242, operated by Strike Oil, Bottineau County
26018, Remuda Energy Development LLC, for an enhanced hydrocarbon recovery project in the Little Missouri-Pierre Unit, through injection of water or other fluids; Bowman County;
26019, Oasis, BAnks-Bakken, setback rules, McKenzie County
26020, Oasis, Banks and/or Elidah-Bakken, establish an overlapping 5120-acre unit, 4 wells, McKenzie
26021, Petro Harvester, Short Creek-Madison pool, four sections, 26/27/34/35-164-93, establish four standup 400-acre units; 2 horizontal wells in each; Burke County
26022, Petro Harvester, Woburn-Madison pool, establish two 1280-acre units, one hz well on each
26023, MRO, Eagle Nest-Bakken; establish a 1920-acre unit; 11 wells; Dunn County
26024, Kraken Oil, commingling
26025, MRO, commingling
26026, Petro Harvester, SWD, Short Creek Field, Burke County

Thursday, August 24. 2017

Comment: Liberty Resources appears to have the most cases on Thursday's dockets, by a long, long shot.
26027, NDIC; establish/alter spacing units in Phelps Bay-Bakken, 13-153-95; and Elm Tree-Bakken, 18-153-94, McKenzie
26028, Ballard and Berenergy, Chatfield-Madison pool, redefine field limits and rules, Bottineau County
26029, XTO, St Jacobs-Bakken redefine field limits and rules, Billings County
26030, WPX, Wolf Bay-Bakken, establish an overlapping 2560-acre unit; 1 well; Dunn County
26031, WPX, Reunion Bay and/or Van Hook-Bakken; establish an overlapping 2560-acre unit; 1 well, Mountrail
26032, WPX, Spotted Horn-Bakken, establish an overlapping 2560-are unit; 1 well, McKenzie County
26033, Liberty Resources, North Tioga-Bakken, establish an overlapping 1280-acre unit; 1 well; Burke County
26034, Liberty Resources, Gros Ventre-Bakken, establish a 1920-acre unit, 8 wells, Burke County
26035, Liberty Resources, McGregor-Bakken; authority to use numerous wells located in 8/17-158-95 as injection wells for an enhanced oil recovery pilot operation; Williams County
26036, PetroShale, Mandaree-Bakken; establish an overlapping 640-acre unit; 3 wells, Dunn County
26037, PetroShale, Antelope-Sanish, establish two overlapping 2560-acre units; 1 well each; McKenzie
26038, CLR, exception to rules, Miles 8-6H1 (#33220), McKenzie County
26039, CLR, exception to rules, State Weydahl 11-36H (#32819), Dunn County
26040, Hydroil Solutions; treating plant, McKenzie County
26041, Waste Management, SWD, McKenzie County
26042, Waste Management, SWD, McKenzie County
26043, Nine Point Energy (formerly Triangle Petroleum), pooling
26044, Crescent Point Energy, pooling
26045, Crescent Point Energy, pooling
26046, Crescent Point Energy, pooling
26047, Liberty Resources, pooling
26048, Liberty Resources, pooling
26049, Liberty Resources, Gros Ventre-Bakken, on an existing 1920-acre unit, 8 wells; Burke County
26050, Liberty Resources, Enget Lake-Bakken, on an existing 1280-acre unit; 28/33-158-93, 8 wells; Mountrail County
26051, Liberty Resources, re-work Gohrick 158-95-17-8-4MBH (#28439); Williams County
26052, Liberty Resources, re-work Gohrick 158-95-17-8-5TFH (#28440); Williams County 
26053, Liberty Resources, McGregor-Bakken, re-work, for temporary injection of fluids, 8/17-158-95, Williams County
26054, Liberty Resources, McGregor-Bakken, re-work, for temporary injection of fluids, 8/17-158-95, Williams County
26055, Liberty Resources, McGregor-Bakken, re-work, for temporary injection of fluids, 8/17-158-95, Williams County
26056,, Liberty Resources, McGregor-Bakken, re-work, for temporary injection of fluids, 8/17-158-95, Williams County
26057, Liberty Resources, McGregor-Bakken, re-work, for temporary injection of fluids, 8/17-158-95, Williams County
26058, WPX, Wolf Bay-Bakken, on an existing 1280-acre unit, 28/33-147-92, 10 wells; Dunn County
26059, CLR, commingling
26060, EOG, SWD, Mountrail County

A continued case: 25660.
This is a continued case. I normally don't report continued cases (since they have been posted earlier) but this one seems huge, and one I had missed:
25660, QEP seeks an order suspending and revoking thirteen permits issued to EOG for several Bear Den wells in the Spotted Horn-Bakken pool, sections 30/31-150-94, specifically file numbers: 33303, 33301, 33300, 33306, 33310, 33309, 33308, 33302, 33307, 33299, 33298, 33304, and 33305.

OPEC Production Hits New 2017 High In July -- IEA -- August 11, 2017

Active rigs:

$48.438/11/201708/11/201608/11/201508/11/201408/11/2013
Active Rigs573370194184


RBN Energy: a new, more competitive era for LNG shipping.

I'm shocked! Shocked! From The Wall Street Journal -- global oil supply grows on higher OPEC output despite deal. Cartel's crude production hit new 2017 high in July -- IEA.

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The Market And Energy Page, T+203

Dividends! six energy stocks set to raise dividends as oil prices stabilize -- the story is a bit weak on specifics, but mentions these companies, some of them simply in passing. Take this article with a grain of salt. The six companies: XOM, COP, Marathon (MPC), ONEOK, WMB, and KMI.

Enerplus: not surprising, considering results in the Bakken. Enerplus posts a 2Q17 profit after reporting a loss a year earlier. Adjusted, EPS, 24 cents per share. 

More restaurant closings: from Syracuse.com, data points --
  • parent company, DineEquity: IHOP and Applebee's
  • will close 160 locations 
  • originally only 40 - 60 Applebee's locations expected to close; now 105 - 135 locations 
  • IHOP: 20 - 25, up from the original 18 expected
  • in another story, it was reported that although both will close locations, they will open some new locations, also
JCP: losses mount; misses estimates; stock craters.

AAPL: shares took big hit yesterday when the Dow pulled back 250 points; today it's up a percent or two.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here.

Tea leaves: scrolling through energy news this morning, the tea leaves suggest --
  • traders think the worst is over for oil
  • oil companies can adjust to any oil price, as long as it remains stable; WTI seems to be stabilizing; seems to have a new floor -- $45, and the trend is up
  • global storage inventories dropping albeit very, very slowly, but on a reasonable track
  • "fast and fury" already "old news" -- except on CNN and MSNBC (neither of which are followed by investors)
  • being ignored: the end of the US driving season is upon us
Backwardation: the current buzzword on the street. See Reuters article via Rigzone