Monday, March 26, 2018

It Never Quits -- Now, Look At This - March 26, 2018

What do you think of this production profile?

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
MADISON1-201829196319745867493348170
MADISON12-201731282228267182563354780
MADISON11-201730301829105999355034000
MADISON10-201718241320143080134612560
MADISON9-20172828186103351950
MADISON8-2017311852242108536980
MADISON7-2017311302081438887330
MADISON6-2017191892012918137180
MADISON5-201720369419397126611660

Pretty cool, huh? Production jumps 20-fold? [20 x 130 = 2,600].

From the sundry form received September 11, 2017:
Move in workover rig and pull rods and tubing. Nipple up frac tree and treesaver to isolate wellhead. Move in and rig up the frac fleet and frac well with approximately 14,000 bbls of gelled fluids containing approximately 400,000 lbs of the frack sand. Well will be frac'd pursuant ot NDAC 43-02-03-27.1. Nipple down frac tree and tree saver and run production equipment back into well. Return well to production.
But this isn't so great, really, is it? We see it all the time when a well is re-fracked.

And here's the graphic:



The well:
  • 19551, 215, Challenger Point Energy, LLC, Olney 2-25H, Flaxton, t5/11; cum 51K 1/18
But here's the kicker: it's NOT a Bakken. It's a Madison well. 

Don't believe me? Here's a screen shot of the scout ticket:


By the way, what's the best this well has ever done? From the very beginning:

MADISON9-201130159714632211335132010
MADISON8-201131194921112993437642210
MADISON7-201122214519724048338332730
MADISON6-201111157314772363148114810
MADISON5-201116176920273351174516600
MADISON4-201124232818185566166715470
MADISON3-20119500297839340

The sundry form / completion form with the completion data says the well:
  • had five laterals
  • was completed March 30, 2011
  • was tested May 6, 2011
  • there is no evidence this well was fracked at this time; first frack was apparently in 2017
Yes, it's the Madison -- and we saw it first in North Dakota -- LOL --

From Hairspray

Random Update Of CLR's Bud Wells In Crazy Man Creek -- March 26, 2018

Disclaimer: in a long note like this there will be factual and typographical errors. In addition, I could have mixed up some of the data (production data, frack data, etc) but I doubt it. When I see a jump in production in a horizontal well 1,320 feet away it makes me think I recorded something incorrectly, but I think it's all correct. I certainly appreciate any feedback if any of the data is incorrect.

At this post, I posted the production data for #19424 -- but looking at it now, not quite sure why I posted it. Whatever.

With updated production, it's time to look at it again.

There is no evidence that any of the wells below have been re-fracked. FracFocus has no data for a re-fracks; and, there are no sundry forms suggesting the three older wells were recently re-fracked. But the production has jumped so much it's hard to believe these wells have not been re-fracked.

In addition, note the distance between the wells. Pay attention to which wells are middle Bakken (MB) and which are Three Forks (TF).

The graphics:






The first well of interest:
  • 19424, 662, CLR, Bud 1-19H, Crazy Man Creek, API - 33-105-01935, t3/11; cum 381K 1/18;
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20182677917921869613167157611591
BAKKEN12-20172813162132621402619878694912929
BAKKEN11-201730174591750916240292681017519093
BAKKEN10-201730238102341423116296751493914736
BAKKEN9-201716490551791038974774956982
BAKKEN8-20172613529132632550018914110277887
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-20170000000
BAKKEN4-20170000000
BAKKEN3-20177579717453547283264
BAKKEN2-20171720141870116119701360610
BAKKEN1-2017411293315150
BAKKEN12-201626246325071213284328430
BAKKEN11-201630323730481950435943590


Original production after initial completion:
BAKKEN11-2011307802837825821030646885618
BAKKEN10-2011319327860128881099286182374
BAKKEN9-20112993529836298011374113740
BAKKEN8-2011311113211157364412967119331034
BAKKEN7-2011309319923233631033775062831
BAKKEN6-201126113951117538751178742311364
BAKKEN5-201123540153401918603606036
BAKKEN4-201130780381273903876008760
BAKKEN3-20112212972122702862975609756
BAKKEN2-2011723523502330233

Recent neighboring fracks:
  • 30239, middle Bakken, fracked 3/25/17 - 4/7/17, frack data: 9,927,082 gallons, 88.97% water; 10.9% sand;
  • 30240, Three Forks, 1st bench, fracked 3/26/17 and 7/4/17 - 7/12/17; frack data: 7,026,667 gallons, 88.7% water; 10.9% sand;
  • note: 10 million gallons of water in one well, a big frack but not "out of bounds"; 7 million gallons of water in the other well, a moderate frack
What about the other two wells of interest, #28937 and #28938? Frack data:
  • 28937, fracked once, back in 2014
  • 28938, fracked once, back in 2014
Recent production data for these two wells.
#28937 TF (huge jump in production, but delayed a month or two compared to wells above):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2018318953898584351217953811424
BAKKEN12-20173111082108931043617702258314894
BAKKEN11-2017301476415149151842284621322393
BAKKEN10-2017249091876011863136882613493
BAKKEN9-201730900260021405
BAKKEN8-201731135053873761303
BAKKEN7-20171840841365404362950
BAKKEN6-201727468649938845579355840
BAKKEN5-201717336929797762397438380
BAKKEN4-201720033200
BAKKEN3-20172330183275276438002766417

#28938 MB (minimal, if any, jump in production):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2018139021084105225200#30240)
BAKKEN12-20173143094527374259302135
BAKKEN11-20173057675800540770345255747
BAKKEN10-20173169827106708583051107408
BAKKEN9-201730337732494602454503784
BAKKEN8-201731559956336247326902488
BAKKEN7-20172332773219449022341314316
BAKKEN6-20173057055572563739302886119
BAKKEN5-20171729572629327214489060
BAKKEN4-201720060400
BAKKEN3-201725474649284713623251230
BAKKEN2-201728563360704805993297380
BAKKEN1-201725569752034672365734780

Bottom line:
  • no evidence that three wells of interest were re-fracked, but production in one of them (#19424) is so high, it's  hard to believe it was not re-fracked; a second well had a large jump but not as big; the third well had minimal (if any) jump in production
  • the oldest well was 633 feet away from the new (2017) fracks
  • #28937  - a Three Forks well -- had a huge jump in production; it was about 1,320 feet from a middle Bakken well and about 1,380 feet from another Three Forks well (#30240)
  • 1,320 feet / 1,380 feet is about twice what I normally seen between older fracked wells and newer fracked wells with bump in production after newer wells fracked
Disclaimer: in a long note like this there will be factual and typographical errors. In addition, I could have mixed up some of the data (production data, frack data, etc) but I doubt it. When I see a jump in production in a horizontal well 1,320 feet away it makes me think I recorded something incorrectly, but I think it's all correct. I certainly appreciate any feedback if any of the data is incorrect.'

Note: if what I have posted is correct, and if what I see is correct, this has huge implications for the Bakken and the Three Forks.

Random Note Regarding Global Crude Oil Supplies -- March 26, 2018

I have a pretty good "feel" for US crude oil production, inventories, supply and demand, etc., after blogging for the past eleven years on the Bakken. I have almost no "feel" for the same metrics globally. It seems "everyone" is writing that global inventories of crude oil are well below their five-year average, including this from oilprice.com:
A year and a half on from OPEC’s original deal to limit output, the surplus oil stashed in storage tanks around the world are nearly back to average levels. However, by all indications, OPEC is not ready to ease up on the production caps, with top officials signaling a desire to keep the cuts in place into 2019.
But that might require changing of the definition of a “balanced” oil market. OPEC has consistently held up OECD inventories as the metric upon which it was basing its calculations. The goal was to drain inventories back down to the five-year average. With OECD inventories about 44 million barrels above that threshold in February – down from a roughly 300-million-barrel surplus at the start of 2017 – the goal will likely be achieved at some point this year, perhaps in the second or third quarter.
So, let's see if we can find a graphic of the historical global crude oil inventory.

From the EIA:

This is what I see in that graph:
  • inventories are right in the "middle" with data going back to 2013
  • something no one talks about: inventories were at historic lows (2013 - 2019) in late 2014 just before the Saudi Surge (announced November, 2014) and did not drop again until Saudi ended the surge (announced November, 2016) -- it makes me wonder about the Saudi Surge all over again -- why and what it really meant
  • once the Saudi Surge ended, OECD inventories dropped but, shoot, they are still right in the middle of the range, and projections by the EIA suggests inventories will rise, not fall
  • many feel the EIA is too conservative with shale estimates; if so, their projections may be low
  • the graphic is pretty impressive -- but something I never seem to hear anyone talking about: days of inventory -- look at that x-axis -- two things are noted
    • the range is very narrow -- fifty-five to sixty-five days (2013 - 2019)
    • EIA estimates that by January, 2019, less than a year from now, days of supply will actually increase

Statoil Knoshaug Wells In Avoca Oil Field

An old Knoshaug well has come off-line (March 26, 2018). When I see that, my first thought: neighboring wells soon to be fracked.

The Knoshaug wells:
  • 19406, IA/3,761, Statoil, Knoshaug 14-11 1H, Avoca, t1/11; cum 310K 1/17; came off-line 11/17; remains off-line, 11/18;
  • 32866, 877, Statoil, Knoshaug 14-11 2TFH, Avoca, t6/18; cum 84K 11/18;
  • 32867, 769, Statoil, Knoshaug 14-11 3TFH, Avoca, t6/18; cum 85K 11/8;
  • 32868, 1,975, Statoil, Knoshaug 14-11 4H, Avoca, t6/18; cum 109K 11/18;
  • 32869, 744, Statoil, Knoshaug 14 11 5TFH, Avoca, t6/18; cum 51K 11/18;
  • 32870, 2,394, Statoil, Knoshaug 14 11 6H, Avoca, t8/18; cum 91K 11/18; 
  • 32871, 2,043, Statoil, Knoshaug 14-11 7TFH, Avoca, t7/18; cum 45K 11/18;
  • 32872, 1,584, Statoil, Knoshaug 14-11 XE 1H, Avoca, t7/18; cum 79K 11/18;
#32870:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-20181615145152422190718503155842804
BAKKEN10-20182427724278743084432536268715533
BAKKEN9-20182830353301983589933990270986771
BAKKEN8-2018101577415477195551585315131651
BAKKEN7-201822397232048768398280

ICYMI: A CLR Buelingo Well -- March 26, 2018

See production update here.

The most important story line here: Elm Tree oil field. Although not updated, the Elm Tree is followed here.

Four New Permits; Eight (8) DUCs Reported As Completed -- March 26, 2018

Active rigs:

$65.653/26/201803/26/201703/26/201603/26/201503/26/2014
Active Rigs59493299198

Four new permits:
  • Operator: Hess
  • Field: Blue Buttes (McKenzie)Comments: Hess has permits for a 4-23ll BB-
  • Federal pad in SENE 20-151-95
Six permits canceled:
  • Resource Energy Can-Am (4): a Marlys permit; an Arnette permit, a Castle State permit; and, a Gary permit, all in Divide County
  • Whiting (2): two P Ellis permits in Williams County
Eight producing wells (DUCs) reported as completed:
  • 25844, 754, Slawson, Periscope Federal 7-10-11-12TH, Big Bend, t2/18; cum --
  • 31439, 754, Slawson, Periscope Federal 6-10-11-12TFH, Big Bend, t2/18; cum --
  • 33210, 1,102, XTO, Lundin Federal 11X-4B, North Fork, t3/18; cum --
  • 33367, 1,547, Whiting, Cavalli State 34-9-5HU, East Fork, t3/18; cum --
  • 33368, 3,131, Whiting, Cavalli State 34-9-4H, East Fork, t3/18; cum --
  • 33553, 480, BR, Gladstone 3-1-25 MBH A, Sand Creek, t2/18; cum --
  • 33554, 224,  BR, Gladstone 2-1-25TFH A, Sand Creek, t2/18; cum --
  • 33555, 782, BR, Gladstone, 1-1-25MBH A, Sand Creek, t2/18; cum -- 
CLR with three dry holes:
  • Pasadena wells in McKenzie County, #34547, #34548, and #34549

Royalties And Stripper Wells -- March 26, 2018

Updates

Later, 9:39 p.m. Central time: the third answer provides the tax differential when a well goes to stripper status:
When a well is declared a “stripper” by the ND Oil and Gas Division the state
tax is lowered from 10% to 5%.  At a given volume and price, the net royalty is
5% higher on a stripper well.  
Later, 5:44 p.m. Central Time: the second answer I got:
a) stripper wells have no impact on the royalty payments of mineral owners
b) monthly minimums may have to be met to "cut" a check
Later, 5:43 p.m. Central Time: the first answer I got, from Phil McPherson, a CFO in Newport Beach, CA:
Though each lease varies, I have never seen a clause in the 100's of leases that I reviewed as having something for stripper wells that is different than an "economic" well.
Original Post

I've long forgotten -- if I ever knew -- does anyone know how royalties are affected when a well goes to "stripper" status?

A reader wants to know and I'm hesitant to answer.  E-mail responses are kept confidential; comments can be made anonymously. If you have a great answer and want credit for the answer, let me know. Thank you, on behalf of the reader who is curious.

FWIW -- On A Day The Market Soars -- March 26, 2018

Maybe more later, I'm going biking.

Oh, one last political observation. In foreign affairs, every president has a gazillion irons in the fire. For Trump, just a few of the top ten: Russia, China, Iran, NAFTA, the wall, the Korean peninsula, Saudi Arabia.

It's interesting to rank those on the foreign-affair list based on media coverage. It appears to me that Russia has fallen to the bottom of the top-ten list even with the president expelling 60 Russian spies and "shuddering" (as the AP calls it) the Seattle consulate? Rising to the top of the list: China. I think the focus on Asia by Trump has really, really gotten Kim Jung Un's attention.

Okay, one more observation. I realized this past weekend, it's impossible for folks like me to hold a "political conversation" with others. Why? Because no one knows what "fake news" each has been reading. As an example, I have no idea where my wife gets her "sources." She assumes she knows where I get my "sources," but I suspect she is really, really wrong. Mostly because I keep changing my top ten news "sources."

Right now, the best political analyst on radio: Rush Limbaugh. Everyone agrees (based on mainstream media outslets), whether one agrees with him or not.

The best social media commentator: Scott Adams (twitter).

By the way, my son-in-law and I agreed that of the three (Bernie, Hillary and Trump), Bernie was the most dangerous (had he been elected). Two hours after noting that, I realized I was wrong. Counter-intuitive, and my son-in-law (nor my wife) would agree with my reasoning.

Okay, not I'm going biking.

**************************
Notes to the Granddaughters

One book today: The Most Dangerous Book: The Battle for James Joyce's Ulysses, Kevin Birmingham, c. 2014

First "home" after leaving Ireland with Nora: Pula, a small outpost on the Istrian peninsula.

Trieste, Italy: much like Dublin when Nora and James moved there. Trieste's predominantly Italian population had been under Austrian rule for hundreds of years, long after the unification of Italy in 1861. Trieste Italians demanded to be part of the new Italian state.

Back in 1801, a new law from London simply dissolved the Irish assembly to create the United Kingdom of Great Britain and Ireland. From then on, a continued fight between Irish and the English.

From page 54:
Ulysses began as a whim. It was originally an idea for a short story to tag along in Dubliners. Alfred H. Hunter -- the lonely, benevolent Jew in Dublin who had lifted Joyce from the dirt in St Stephen's Green -- was a hero of the Trojan War, the protagonist of Homer's greatest epic, the king of Ithaca, Ulysses. The Hunter-as-Ulysses equation was well suited for a short story but the concept had undergone some unforeseeable growth in Joyce's mind. In 1914, he began gathering ideas. Joyce mapped the events of hte ancient tale of the Odyssey unto Dublin: a funeral in Glasnevin cemetery was a descent into Hades. His friend Byrne's little flat on Eccles Street was Ulysses' palace in Ithaca, and the barmaids at the Ormond Hotel were the Sirens. He had a name for his Ulysses: Leopold Bloom. Stephen Dedalus was Telemachus, Ulysses' son. Stephen was a son whose father lost, and Bloom was a father finding his way back to his son. His wife Molly, was Penelope patiently waiting for her husband's return from the Trojan War.
From page 56:
Joyce wanted Stephen's thoughts to be clipped and prismatic. He wanted to strip thoughts and emotions down to their essentials (no stream of consciousness; the very opposite of Henry James). He wanted density, the bones of communication, the sharp utterance, the urgent telegram, the MOTHER DYING COME HOME FATHER (think Hemingway).

Chapter 5: Smithy of Souls -- 
the story of Miss Harriet Weaver -- 
this chapter worth the price of the book.

Ezra Pound, Harriet Weaver, and Dora Marsden were only marginal figures in a world preoccupied by war -- but a supportive coterie was enough to encourage Joyce to venture much further out ito this writing than he ever had before.

Chapter 6: Little Modernisms

Modernism.

Magazines (at that time) were modernism's blogosphere.

The Little Review, founding editor, Margaret Anderson -- the woman destined to bring Ulysses to the public, no matter how controversial it was. In the March 1915 issue, Anderson became possibly the first woman to advocate gay rights in print ...

Anderson grew up in Indiana and attended Ohio's Western College for Women, an offshoot of Mount Holyoke.

Jane Heap.
Chapter 7: The Medici of Modernism -- 
the story of Ezra Pound in 1915

Ezra Pound wanted The Little Review to be his "official organ" in the United States; it had 2,000 subscribers, exactly what he wanted.

Pound became The Little Review's foreign editor in May, 1917 -- think Hunter S Thompson and The Rolling Stone.

Press advertising, virtually nonexistent before the Civil War, became a billion-dollar industry by WWI -- think the Internet and social media.

Chapter 8: Zurich

1915; escapes to Switzerland from Trieste, Austrian zone.

From page 96:
Whatever else happened, the Joyces always ate dinner as a family. Mother (Nora) and father (James) spoke Triestino with Giorgio (older sib, first and only son) and Lucia at various restaurants as if sharing a secret argot, a verbal performance of a shared life from from Zurich.
February, 1917: severe iritis. Became glaucomatic.

Somehow, p. 99, despite war, pain, atropine hallucinations and his inability to earn an income - Joyce found ways to write Ulysses.

Part II

And this is where I will quit for today.

153-97-8, Banks Oil Field, Whiting, Hellandsaas And Frick

Coming off confidential list this week, the Hellandsaas wells, including:
  • 32995, 2,341, Whiting, Hellandsaas 44-8-1H, Banks, 30 stages; 6.2 million lbs, medium/small; a very, very nice well; 80K+ in first four full months; (#19533 with nice jump in production); t10/17; cum 90K 1/18; 
The graphics:



Production data for #19533:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20183147814836114801920118920188
BAKKEN12-20173183388272193441785017562195
BAKKEN11-201727646964342098499209374466
BAKKEN10-20176514504418316951557127
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-20173465663143101801009
BAKKEN5-201731314332291695963385051035
BAKKEN4-20173029392992217086518397170
BAKKEN3-20173132053295259993468962294
BAKKEN2-2017282910279817088027792914
BAKKEN1-2017313476419818518788864550
BAKKEN12-20163136273058253696759377205
BAKKEN11-20163037013424397196219203330
BAKKEN10-20161153566619802176210243
BAKKEN9-201630201018401198820781170

Production data back in when #25803 was completed, #19533:
BAKKEN8-20142627783589173865346152305
BAKKEN7-20142839473152286380287729216
BAKKEN6-2014111294136380029912562400
BAKKEN5-20143135394048229172216641487
BAKKEN4-201430352035812872747262271155
BAKKEN3-201419318327454731780255252224
BAKKEN2-201444556711521651161920
BAKKEN1-20143131243559121090468445509
BAKKEN12-201327302421881822786156752107
BAKKEN11-201330306629221863757253472135
BAKKEN10-201331275929271551561742581267
BAKKEN9-201330260726381374830966781547
BAKKEN8-201331327532839401037684441840
BAKKEN7-201329296630668591327386374556

*************************
The Frick Wells

The Frick wells are still on the confidential list (SI/NC). Early production data suggests great wells:
  • 32982, SI/NC, Whiting, Frick 24-8-1HU, producing, see below;
  • 32983, SI/NC, Whiting, Frick 24-8-1TFH, producing, see below;
  • 32984, SI/NC, Whiting, Frick 24-8-2TFH, producing, see below;

32984, SI/NC, Whiting, Frick 24-8-2TFH:

DateOil RunsMCF Sold
1-2018636329646
12-20171338638865
11-20171563760414
10-2017880216760

32983, SI/NC, Whiting, Frick 24-8-1TFH:

DateOil RunsMCF Sold
1-20181809267390
12-20172366879758
11-20172577885578
10-20171933148167

32982, SI/NC, Whiting, Frick 24-8-1HU:

DateOil RunsMCF Sold
1-20181953658141
12-20172688180234
11-20172551564626
10-20171661240622