Friday, August 25, 2017

WPX Behr Wells In Reunion Bay

The wells (three run north/three run south)
  • 31859, 2,776, WPX, Behr 19-18HUL, Reunion Bay, Three Forks, 50 stages; 8.4 million lbs, t7/18; cum 191K 11/18; huge well, 100K in less than 2 months; see update here;

    DateOil RunsMCF Sold
    8-20184525926805
    7-2018552121018
  • 30828, 597, WPX. Behr 30-31HU, Reunion Bay, sections, t1/17; cum 206K 11/18;
  • 30825, 401, WPX, Behr 30-31HTL, Reunion Bay, 4 sections, t1/17; cum 212K 11/18;
  • 30826, 571, WPX, Behr 30-31H1, Reunion Bay, middle Bakken, 2 sections, 40 stages, 6 million lbs, t1/17; cum 289K 11/18;
  • 30827, 1,40, WPX, Behr 19-18HT, Reunion Bay, t7/18; cum 145K 11/18; 54K in two months; a huge well; 145K in less than 5 months; will be pretty much paid for in the first year; it will produce for 30+ years;
  • 30824, 2,649, WPX, Behr 19-18H1, Reunion Bay, t7/18; cum 162K 11/18; 41 stages; 6 million lbs, huge well, 100K in less than 2 months;

    DateOil RunsMCF Sold
    8-20184395828140
    7-20185776510089

For those running north, #20051 is closest on the east, horizontals are about a half-mile way; showed a very, very slight bump in production. To the west:
  • 26154, Alfred Old Dog, cum 403K 11/18; no jump in production noted;
  • 26153, Alfred Old Dog, cum 267K 11/18; no jump in production noted;
  • 26147, Alfred Old Dog 19-18HC, 393K 11/18; no jump in production noted;
For those running south, to the west:
  • 26148, Alfred Old Dog 30-31HY, 296K 11/18; no jump in production noted;
  • 26149, Alfred Old Dog 30-31 HC, 342K 11/18; no jump in production noted;
  • 26152, Alfred Old Dog 30-31HD, 286K 11/18; no jump in production noted;
The graphic:


Week 34: August 20, 2017 -- August 26, 2017

Operations
Staggering one-month production in two Bakken wells
An EOG Austin well hits 1 million bbls produced
Jump in production -- one of the peculiarities of the Bakken

Fracking / Re-Fracking
Random update of an MRO re-fracked well 
MRO reporting nice DUCs 
Update on fracking sand 

Bakken 2.0
Some huge DUCs being reported

Bakken economy
Williston public school district #1 hits all-time enrollment record  

Congratulations! An EOG Austin Well Hits Produces One Million BBls Of Crude Oil -- August 25, 2017

This well is a short lateral; one million bbls some months ago, probably in December, 2016/January, 2017; (for newbies, some folks suggest that a short lateral can be extrapolated to double the production had it been a long lateral; if so, this well would have produced greater than 2 million bbls in less than 10 years:
  • 17227, 2,191, EOG, Austin 21-28H, Parshall oil field, t8/08; cum 1.03111 million bbls; still some flaring; API: 33-061-00731; and based on data at FracFocus, this well was not re-fracked;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-2017304194418140927361972521
BAKKEN5-201731456945764742860253177
BAKKEN4-2017304867486083327012268189
BAKKEN3-201731495449689982710236791
BAKKEN2-201728545154644282693245413
BAKKEN1-201712191619193589798920
BAKKEN12-20163052615395905284225979
BAKKEN11-20163054595560997278325345
BAKKEN10-20163157465534999273812611232
BAKKEN9-20163055085474112825782203137
BAKKEN8-2016315444542716242333204539
BAKKEN7-2016314253418227211800148860
BAKKEN6-201671197012021295818
BAKKEN5-20160000000
BAKKEN4-20160000000
BAKKEN3-20160000000
BAKKEN2-20160000000
BAKKEN1-20162017541797931911170843
BAKKEN12-201531271427129828562021595
BAKKEN11-201530272127196228281679905

This well runs parallel to 17227:
  • 32419, 678, EOG, Austin 423-2821H, Parshall, 32 stages; 12.4 million lbs, t6/16; cum 203K 6/17; API - 33-061-03927; total depth, 16,343 feet; middle Bakken (note well name); very low gas in the lateral; 1280-acre spacing;
Recent production for #32419:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-2017291235512337213718880119726453
BAKKEN5-2017311342013412362016848145711796
BAKKEN4-20173087578704846489607960516
BAKKEN3-20171231153122227229592707128
BAKKEN2-20174182218318181677152886
BAKKEN1-20171045484688828570844321159
BAKKEN12-2016312149821468325223816202093119
BAKKEN11-2016302288122812393523093175765033
BAKKEN10-201624183941842632991465250289261
BAKKEN9-2016302802728056639221332154455406
BAKKEN8-2016312994829957963819100149343666
BAKKEN7-20163132062320022128919312798210836
BAKKEN6-201613647763871045817541251318


Note: We'll see the same thing with #17120 and 17222 soon.

Twenty-Three (23) Permits Renewed; Active Rigs Finish The Week At 55 -- August 25, 2017

Active rigs:

$47.868/25/201708/25/201608/25/201508/25/201408/25/2013
Active Rigs553174194184

Seven new permits:
  • Operators: MRO (4); Petro Harvester (3)
  • Fields: Reunion Bay (Mountrail); Portal (Burke)
  • Comments: MRO has permits for a four-well pad in 30-151-93
Twenty-three (23) permits renewed:
  • Zavanna (7): seven Hunter permits in McKenzie County
  • MRO (6): Jerome USA, Jorgenson USA, Joshua USA, Lamarr USA, Whitebody USA, and Loren USA permits in McKenzie County
  • QEP (4): four MHA permits in Dunn County
  • Statoil (3): two Reiten permits and one Michael Owan permit, all in Williams County
  • HRC (2): two Fort Berthold permits in Dunn County
  • WPX: one Behr permit in Dunn County
One permit canceled:
  • MRO: a Dragswolf USA permit in McKenzie County
******************************
The Music Page

Quick: how are these two songs connected?
  • Wild Thing
  • Angel of the Morning
Who "discovered" Merrilee Rush?


Angel of the Morning, Merrillee Rush

Another Nail In The Nuclear Energy Coffin -- Regulations And Regulatory Delay As Much A Reason As Natural Gas -- August 25, 2017

From The Wall Street Journal today: Duke Pulls Plug on Nuclear Plant; the cancellation is the latest blow to sector. The Lee nuclear project had planned to use Westinghouse reactors.
Duke Energy Corp. said Friday that it is abandoning plans to develop a nuclear power plant in South Carolina, in the latest blow to the U.S. nuclear industry.

The company had planned to build two reactors designed by Westinghouse Electric Co. The March bankruptcy of Westinghouse, a unit of Toshiba Corp., led Duke to reconsider moving ahead.

“The risks and uncertainties to initiating construction on the Lee Nuclear project have become too great, and cancellation of the project is the best option for customers,” Duke spokesman Neil Nissan said.

Construction on the William States Lee III Nuclear Generating Station hadn’t begun yet.
Duke said it plans to file a petition with the North Carolina Utilities Commission to abandon the project. It was to be located near Gaffney, S.C., and provide power for customers in both North Carolina and South Carolina.

Duke said it had spent $542 million on the project to date, mostly on securing a license from the federal government, engineering and site acquisition. The company said it would file with state regulators to pass these costs on to electricity customers.

The decision to pull the plug was driven in part by large cost overruns to build other Westinghouse AP1000 nuclear reactors. Late last month, Scana Corp. decided to abandon work on a half-built AP1000 as costs swelled from $14 billion to a projected $25.7 billion. Southern Co. is struggling with rising costs at a half-built nuclear power plant in Georgia.

Duke said its decision was partly driven by the cost increases and time delays at the Scana project. It will maintain the South Carolina site and take “minimal steps” needed to keep the federal license.
One half billion dollars just for planning and licensing. Wow. Oh, well. Pass the costs on to the consumers. 

Boomtown's School Enrollment Hits All-Time Record -- August 26, 2017

Some time ago I opined that the #1 metric to determine how things were going in the Bakken was school enrollment. I can't remember now, but I think it was enrollment for this school year that I was going to watch; perhaps it was next year; I forget.

I also suggested that the more "sub" metric was whether the increase was high school enrollment vs elementary school. Whatever my rationale was, it was probably flawed. One can make an argument either way, I suppose.

But it is what it is and this is great news for the Bakken. After going through two years of "bust" in the Bakken, enrollment actually hit a record last year, and then it hit a new record this year:
The Williston Public School District #1 has released the final first day of school enrollment. A total of 4,201 students started the 2017-18 school year on Tuesday, Aug. 22. The total is the highest on record. Last year there were  3,922 students and 2,467 in 2010.

Best Video In The Last 30 Days -- August 25, 2017

From North Dakota, nothing to do with the Bakken. Apparently it's gone viral -- with 35 views. LOL.

Warning: I downloaded the link in the library; it took quite awhile to download but the library wi-fi is rather "slow." But it does work.

http://www.thedickinsonpress.com/4317525-langdon-nd-man-uses-airplane-deliver-subway-sandwich-friend-busy-farming.

Only in North Dakota.

I was finally able to find it on YouTube (but the link above does have a bit more of the story):


*****************************************
Worth A Read

Why Freud survives.

http://www.newyorker.com/magazine/2017/08/28/why-freud-survives. It's hard to believe how much damage one fraudster could cause. Another example of a bubble of mass hysteria.

The Political Page, T+217 -- August 25, 2017

EVs: Rigzone contributor: greater EV adoption relies on some big "ifs."
Electric vehicles (EV) constitute a very small share of all cars on the road worldwide. According to the International Energy Agency (IEA), the total number of EVs hit 2 million in 2016. Compare that to the nearly 1.3 billion figure of all vehicles worldwide, according to 2015 figures from the International Association of Motor Vehicle Manufacturers, and it's clear that EVs do not currently represent a personal transport juggernaut.
EV penetration in the global vehicle fleet could be considerably greater less than 20 years from now, however. A recent study by Wood Mackenzie and GTM Research predicts that more than one in five vehicles worldwide – or more than 350 million units – could be powered by electricity rather than the internal combustion engine. The study's authors foresee such a sharp EV growth trajectory under what they call a "carbon-constrained scenario."
These are the "big ifs":
Achieving a point where EVs make up more than 20 percent of the world's vehicle fleet would represent a significant milestone, but McConnell cautions that EV uptake faces some formidable obstacles. When asked what the biggest "ifs" are for EVs to become more widely accepted, he ticked off the following list:
  • battery prices will need to fall fast enough so that sticker prices reach parity with internal combustion engine-powered vehicles
  • charging infrastructure will need to be rolled out so that drivers can charge their EVs when and where they want
  • the battery supply chain must "ramp up enormously," and it needs to incorporate battery recycling 
The top-3 list did not include "better batteries" -- longer life, longer range. Not much progress has been made in either area. In fact, the biggest names in the business (Sony, Toyota, Apple, GM) have been working on the "battery problem" for the past twenty years (or longer) and any number of small start-ups in the past ten years have failed or gone bankrupt trying to solve the "battery problem."

This tells me that it is unlikely there will be some major battery breakthrough in my investing lifetime. In fact, hydrogen and fuel cell technology may be the big surprise.

Debt limit: from a CNBC talking head this morning -- the likelihood of a government shut down over "the wall" and raising the debt limit and forcing a government shutdown:
  • Trump does not care about the "GOP brand, and will play to his base (35% of the US population)
  • the DEMS will play to their base -- they won't fund the wall
  • the mainstream congressional GOP -- which the talking head called the "third party" -- will be "left in the lurch" or holding the short straw
All politics is local. A government shut-down is almost assured. The vitriol between T and M almost guarantees it. R seems the most "diplomatic" or should we say, the "most adult" among the three.
  • T: Trump
  • M: Ms Chao's husband
  • R: Ryan
Trump rally continues. Dow 30 up over 100 points in early trading. Trump has been tweeting "like mad" this morning, threatens shutdown of the government, and the market rises 100 + points.

Inflation? What inflation? Central bankers have been trying for decades to "awaken long-dormant inflation" without success.
Anemic inflation has become a bugaboo for global central banks .... it's been a speed bump in the US Fed's path toward normalizing interest rates ...
... maybe central bankers need to encourage the Venezuelan model. LOL. Where's Paul Krugman when you need him?

Lost Decade: on CNBC, while discussing the Fed (Yellen vs Cohn), Rick Santelli called the last ten years, "the lost decade." I've had that "tag" for years.

***************************
Amazon-Whole Foods

I assume almost everyone uses "loyalty cards' when shopping: 5% back on credit card purchases; significant discounts in grocery stores; discounts at gas stations; etc. Hold that thought.

[Last night I stopped at the grocery story for two items: cashier rang up $1.74. When I entered my "loyalty card number," the price came down to $0.99 -- a 43% savings. Don't tell me that Amazon doesn't have a lot of wiggle room on pricing.]

Amazon has said it will cut prices for products at Whole Foods. Talking heads argue that grocery prices really can't be cut that much without losing money.

For Amazon, Whole Foods was about two things (and it's not about groceries):
  • the Amazon Prime credit card (see loyalty card above); and, 
  • distribution centers and logistics behind these stores
Again, repeating, this is all about the credit card. The first is a no-brainer: Amazon has a lot of "wiggle" room on Whole Food prices when one looks at Amazon-Whole Foods-Prime credit card as a complete package. The Amazon Prime credit card costs $99 right now (more than what Costco charges).

It's all about the credit card, but then it dawned on me. I have never missed/lost an Amazon package. But there are occasions when the delivery is compromised/challenged because it is after-hours (or on Sundays when FedEx / UPS cannot get into our gated complex). In some urban areas, I am also aware that porch-theft, especially during the holidays, is a significant problem.

So think about this: I order something from Amazon; have it delivered to my local Whole Foods -- which, by the way is just down the street from where I live -- and then when I get a reminder from Amazon that my purchase has arrived, why wouldn't I combine a grocery shopping trip when picking up my purchase. I'm combing two trips into one; and the round trip is less than 10 miles, which would be perfect for an EV if I had one.

This Amazon - Whole Foods thing is becoming clearer and clearer:
  • Amazon has a lot more wiggle room on grocery pricing than analysts are suggesting
  • Whole Foods combines the best of the "Costco-Club" model
  • Whole Foods Club members are already in place: anyone who has a Prime Credit card becomes a Whole Food Club member
  • Whole Foods will be open to all (unlike Costco) and many non-Prime Credit card shoppers at Whole Foods will get a Prime credit card (it's also possible Amazon-Whole foods will offer a loyalty card to those who do not want to spend $99 for a credit card)
  • we all knew that Whole Foods would become mini-distribution centers, but no one really articulated how they saw that working; now we know (see above)
*******************************

I Can See Clearly Now, Johnn Nash 

The Market And Energy Page, T+217 -- August 25, 2017

Updates

Later, 10:33 a.m. Central Tie: wow, that didn't take long. Fake news. Absolutely predictable. A "green site" says global warming allowed an LNG tanker to cross the northern sea route without an ice breaker. Not quite. See story below. Fake news. But the "fake news" is actually even worse: it's bad, bad news. The Russians have now figured out how to transport LNG through the pristine Arctic. LOL.

Original Post

Global warming? Nope, an ice-breaking LNG carrier: First tanker crosses northern sea route without ice breaker -- BBC News. Data points:
  • commercial LNG tanker
  • from Europe to Asia across the colder, norther route
  • without protection of an ice-breaker for the first time
  • specially-built ship (sort of takes the wind out of the global warming article, doesn't it?)
  • six-and-a-half days -- a record (article doesn't say by how much it beat the old record)
  • carried natural gas from Norway to South Korea 
  • Christophe de Margerie: world's first and, at present, only ice-breaking LNG carrier
Hurricane Harvey: from Reuters  -- fuel prices rise; refineries shut as US braces for hurricane.

Oil is back! From Bloomberg -- China energy giant rewards investors as higher oil buoys profit.
China’s biggest oil producer passed on to investors the benefits of higher global prices with almost 12.7 billion yuan ($1.9 billion) in dividends, the Beijing-based company said Thursday. While seen as a one-time payout, and small relative to international majors, the move raised expectations of more investor rewards this year from China’s state-owned giants.
Earnings by the biggest explorers including Royal Dutch Shell Plc, Exxon Mobil Corp. and Chevron Corp. improved as oil prices in the first half averaged about 30 percent higher than a year ago, near $53 a barrel. That’s helped them generate enough cash to meet investors’ expectations of taming debt while sustaining dividends.
Futures. The Dow 30 futures are very volatile this morning -- bouncing back and forth between 50 and 75 points to the upside on the opening. Will SRE hit $120?

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

Toyota Lexus: sales slide in 1H17; sedan sales suffer; first fall in six years; one word: SUVs. Lexus fells 10% in the US (which comprises nearly half of Lexus' global sales) and 23% in Japan; sales did jump 30% in China. Competitors gaining: Daimer's recently-launched E-Class range and BMW's 5-series. Actually, it's not SUVs, apparently: it's a "model cycle issue." Mercedes and BMW launch new models; Lexus is "long in the tooth."

Active Rigs Back To 55 In The Bakken -- August 25, 2017

Active rigs:

$47.728/25/201708/25/201608/25/201508/25/201408/25/2013
Active Rigs553174194184

Whatever happened to all that "Red Queen" talk?
  • in April, 2014 -- North Dakota produced one million bbls of crude oil / month for the first time in history; 200 rigs drilling
  • today, 207 -- North Dakota producing on million bbls of crude oil / month; 55 rigs drilling; 1,500 well shut-in; 850 DUCs
Hurricane Harvey:
  • Eagle Ford (think EOG) could be shut down for three weeks 
  • refiners supplying 46% of gasoline to US could be shut down two to three weeks
  • tankers will be delayed getting into the Gulf; export, import affected
  • refiners that stay open will have relative glut of oil for next several weeks
  • gasoline production could be constrained
RBN Energy: new pipeline capacity to keep pace with Permian production growth.

Why I love to blog:
  • on CBNC this morning, a brief history of hurricanes in the Gulf
  • off the top of their heads, unable to recall date of the "big" Galveston hurricane
  • posted yesterday on the blog -- whoo-hoo! 
  • will bring that post here (see below)
********************************
The Gulf: 
The Making of an American Sea
Jack E. Davis
c. 2017

One of my favorite books is The Great Sea, David Abulafia, c. 2011, which I paid full price for in Williston, ND, at "Books on Broadway," my all-time favorite bookstore -- except perhaps second to Powell's in Portland, OR.

But I digress.

With tropical storm Harvey bearing down on us here in Texas, perhaps finding this book in the library today was preordained.

Ironically, the author devotes "Chapter 13" to hurricanes. Yeah, I suppose if I was going to write a book about the Gulf of Mexico, I would include a chapter on hurricanes and place it in chapter thirteen. LOL.

The chapter starts, hopefully not presciently, with a photograph of the devastation of Corpus Christi in 1919. Tropical storm Harvey appears to be making a direct, frontal attack on Corpus Christi with landfall tomorrow (Friday) night or Saturday morning.

According to the author, "hurricane" comes from the Yucatan Maya:
They paid tribute to a no-nonsense, one-legged god named Huracan, the divine source of wind and storms and, appropriately, birth and destruction. Their neighbors to the east and southeast, the Taino and Carib, each had a deity of similar name and disposition. From them the Spanish got a word, huracan, for those incomprehensible tempests they discovered in the New World -- acts of God, as they saw them, that wrecked their ships and settlements.
[Speaking of "wrecked," the new TBS television show "wrecked" is worth watching.]

Between 1886 and 2005 there have been 639 hurricanes.
This is slightly more than five on a yearly average. One-third of them either tracked into the Gul or originated there -- nearly two a year. Two many not sound like a lot, yet imagine Californians contending with the same number of major earthquakes every year in the span of a few months. Gulf states are struck by hurricanes fifteen percent more often than all other US states combined, and coastal dwellers in the eastern and northern Gulf, from Key West to Galveston, have to batten down their homes and flee danger more often than any other Americans.
1900. Galveston. September. Official figures, over 8,000 lives lost. Erik Larson puts the number at over 10,000. Either county (8,000 or 10,000) is more than the combined tallies of dead in the 1889 Johnstown food and the 1906 San Francisco earthquake.

1957. Hurricane Audrey. 500 lives lost. Near the mouth of the Sabine River, Louisiana. In the nearly 50 years between Audrey and Hurricane Katrina, there was no deadlier Gulf hurricane (than Hurricane Audrey).  The name Audrey was later retired from usage as an identifier for an Atlantic hurrican.

From the book:
Roughly between Audrey and Katrina, the US coastal population expanded by 70 percent, with the rush to hurricane country the greatest. The Gulf coast population swelled by 150 percent, to fourteen million. The number of housing units soared by 246 percent, double the national increase. Eight of the top ten costliest (adjusted for inlfaiton) hurricanes in the US struck after 2000. Seven were Gulf hurricanes. 
So, this weekend we will see. The "talking head" expert on television this morning seemed not particularly concerned.