Saturday, July 14, 2018

PetroShale Paying Permian Prices For Bakken Acreage -- July 14, 2018

An alert reader caught this story; I would have missed it. It's a big story on many levels.

PetroShale will pay $55 million for 1,981 net acres in the Bakken:
  • 100% operatorship and held by production
  • 19 gross (14.3 net) high quality drilling locations
  • will mean a 24% increase in PetroShale's net drilling locations (from 59.5 to 73.8 locations)
  • 1,981 net acres of land; represents a 34% increase in company's existing acreage
  • average royalty rate: 14%; generally, PetroShale's corporate average is 20%
  • includes 550 boepd of low decline, producing assets
  • includes undeveloped acreage 
  • new acreage located in the core of PetroShale's existing focus area in North Dakota
Permian price paid:
  • $55 million / 1,981 net acres = almost $30,000 / acre 
Seller: an independent oil and gas company, not identified in the linked article

PetroShale's current focus: the Mandaree and Antelope oil fields

Bakken operators: that page has been updated to reflect this news;

Existing permits (from "well search," NDIC):

Note: at the sidebar at the right, I do have a link to "Williston Basin Deals."

Operators in the Antelope oil field that I think might be private (not publicly traded):
  • White Butte Oil Operations, LLC -- two permits
  • Bruin E&P Operating, LLC -- forty-nine permits
Operators in the Mandaree oil field that I think might be private (not publicly traded):
  • Rimrock Oil & Gas -- ten permits 
NOTE: see this post, dated July 11, 2017:
  • Bruin bought Halcon ...
  • 104,000 net acres
  • $1.4 billion 
  • that works out to $13,500 / acre
  • if it was Bruin, they flipped 1,981 acres for almost $30,000 / acre

Week 28: July 8, 2018 -- July 14, 2018

North Dakota sets three new all-time production records (this link):
  • crude oil production
  • natural gas production
  • boe (crude oil + natural gas) production
Another record:
  • number of producing wells: 14,755 (previous month: 14,583)
Not a record, but, (this link)
  • DUCs increased
  • number of inactive wells increased
Apparently the Lodgepole well being drilled southwest of Dickinson was dry
Oasis Ceynar wells should be coming off confidential list soon
Huge production for an MRO Ross well

Trending in the wrong direction on the reservation

Update on sand
Random update of an incredible re-fracked MRO well

Update on "Delta refinery" in Pennsylvania 

Bakken economy
North Dakota tax receipts increased well beyond forecasts; and here, 72% higher than projected;
Williston airport receives another federal financial installment

US gasoline demand is down 
Huge drop in US crude oil reserves 
US crude oil exports hits 3 million bopd

Update On Fracking Sand -- July 14, 2018

Disclaimer: this is not an investment site. I do not know if the linked article is a "sponsored" article over at Yahoo!Financial.

It comes from FreighTech / FreightWaves / Benzinga: an industry shift -- an update regarding fracking sand and ceramics. Some interesting data points:
  • railroads shipping crushed stone, sand, and gravel, in 2018, so far in 2018, year-over-year comparison:
    • UNP: up over 14%
    • BNSF: up almost 12%
    • Canadian Pacific: an incredible 20% (actually almost 21%)
    • but, UNP giving guidance that this may not continue; many operators now switching to "brown sand" found nearer the oil fields
  • US Silica: suggests that 2018 frack sand demand will hit 100 million tons, up from 66 million tons in 2017; and, 33 million tons in 2016
  • US Silica: operators will move to regional ("brown sand") to reduce costs
  • Hi-Crush: "Permian Pearl" sand --produced at the Hi-Crush Kermit facility will begin displacing lower quality regional brown sand by next year; Hi-Crush Kermit production: 3 million tons/year
  • others suggest that oversupply of frack sand will send frack sand prices plunging
  • "supplies are tight now" and "pricing is high but that could change quickly" -- some suggest as soon as later this year
  • it appears the only major unconventional play not with no "regional mines" is the Bakken (see the linked article)

In Case You Missed It -- "Clock Boy's" Fifteen Minutes Of Fame Running Out -- July 14, 2018 -- Two Stories Carried Over From The Obama Administration

I don't think the article at the link mentioned that the "clock boy" family has moved back to the states. It was reported that after some time (about three days) in their adopted home of Qatar, they returned to the states, I forget where. I do not know in which state, country, or universe they are living in now.
"Clock Boy" defamation lawsuit bombs in court -- teen's case dismissed against pundit who ridiculed the student.

President Obama reached out to the Muslim teen on Twitter to praise the boy for his “cool clock” and invite him to the White House as social justice warriors raged over alleged racial profiling and Islamophobia.

Shapiro commented on Fox News that Ahmed’s meeting with Obama at a White House Astronomy Night was “a bit of a downgrade” from the “star-studded event we expected between the president and Ahmed Mohamed where the president was going to knight him, give him the Order of Merit and then declare him the greatest scientist since Isaac Newton,” Twitchy reports.
Keystone XL
or, As I Like To Say:
Hope Springs Eternal

On more serious matters, a reader has done a lot of sleuthing to bring us up to date regarding the Keystone XL. The operators are pressing on; they are obtaining bonds to insure against accidental damage to roads and rights-of-way.

Three links:
  • from the Rapid City Journal, SD PUC has bond for Keystone XL on road damage
  • from the Mitchell Republic, TransCanada files bond for Keystone XL as poipeline prepares for 2019 construction; and, finally, 
  • from the Dakota Free Press, July 13, 2018, TransCanada says Keystone XL staging and prep work begins this month; the Cheyenne River Sioux Tribe Chairman says Keystone XL is not welcome; article fails to mention that the Keystone XL pipeline will not physically touch the CRST reservation -- this reminds me, I have to re-read Don Quixote
This took a lot of sleuthing on the part of the reader. If you would like to set up a "GoFundMe" site for that reader, let me know. Only serious inquiries will be forwarded. How do I know if they are serious? I can tell. LOL.

Wells Off Line For Operational Reasons

Updates: The Raw Data

April, 2019:
  • DUCs: 962 (down 6 from last report)
  • inactive: 1,625 (down 72 from last report)
  • total: 2,587 (down from 2665 last month; this represents about 1,000 more wells than will be drilled this calendar year; 2,561 is about the number of wells North Dakota will complete every three years)
  • WTI was about $2/bbl higher in April, 2019, compared to March, 2019
  • 2,665 last month was probably an all-time high
March, 2019:
  • DUCs: 968, up 74 from last report
  • inactive: 1,697, up 30 from last report
  • total: 2,665 (up from 2,561 last month; this represents about 1,000 more wells than will be drilled this calendar year; 2,561 is about what North Dakota will complete every three years)
  • I do believe that this (2,665) represents an all-time high)
February, 2019:
  • DUCs: 894, up 27 from last report
  • inactive: 1,5667, up a whopping 150 from last report
  • total: 2,561 (up from 2,332 last month, about 800 more wells than will be drilled this calendar year)
January, 2019:
  • DUCs: 867, up 44 from last report
  • inactive: 1,517, up 8 from last report
  • total: 2,384 (up from 2,332 last month, about 800 more wells than will be drilled this calendar year)
December, 2018: 823, down 134 from last report -- huge decrease
  • inactive: 1,509, up 128 from last report -- wow, look at that jump in the number of inactive wells 
  • total: 2,332 (down slightly from 2,338 in the last report; but 2,332 wells is still way more than the total number of wells that will be drilled in North Dakota this year)
November, 2018:
  • 957, down 2 from previous report
  • inactive: 1,381, up 18 from previous report
October, 2018:  
  • 959, up 31 from previous report
  • inactive: 1,363, up 23 from previous report
May, 2018:  
  • 955, up 13 from previous report
  • inactive: 1,569, down 48
April, 2018: 942, up 26 from previous report
inactive: 1,521, down 132

March, 2018: 916, up 15
inactive: 1,653, down 1

February, 2018: 901, up 48
inactive: 1,654, down 100

January, 2018: 853, down 24
inactive: 1,554, up 85

December, 2017: 877, down 6
inactive: 1,469, down 23

November, 2017:

October, 2017:

September, 2017: 853, down 10
inactive: 1,444, down 54

August, 2017: 863, down 26
inactive: 1,498, up 20

July, 2017: 889, up 34
inactive: 1,478

June, 2017: 865, up 35
inactive: 1,458, down 53

May, 2017: 830, unchanged
inactive: 1,511, up 45

April, 2017: 830, up 141
inactive, 1,466, up 167

March, 2017: 689, down 110
inactive: 1,299, down 312 (need to correct typo at that post)

February, 2017: 799, down 3
inactive: 1,611, down 67

January, 2017: 802, down 5
inactive: 1,678, up 105

December, 2017: 807, down 32

November, 2017: 839, down 21
inactive: 1,519, up 16

October, 2017: 860, unchanged
inactive: 1,500 (unchanged (AB and IA)

September, 2017:

August, 2017: 888, down 24
inactive: 1,514, up 44

July, 2017: 912, up 25
inactive: 1,486, down 98

June, 2017: 887
inactive: 1,584

May, 2017: 931, up 39
inactive: 1,584, down 6

Original Post
See Director's Cut, May, 2018, data.

From the June 29, 2018, update, now updated through most recent data, adding data for May, 2018:

From most recent data, May, 2018 - May, 2017, most recent to oldest, which brings us up to date:
  • taken from my posts on the blog. In May, 2017, I started posting DUCs and inactive wells on a regular basis. It's too time consuming to go back and fill in the few months in which I did not post data so I'm not going to fill in that bit of missing data. I think the existing data tells the story
  • data below: month/year, DUCs, inactive wells. All data below, including the up/down change were taken directly from the NDIC Director's Cuts
  • range:
    • an outlier, March, 2017: 689
    • otherwise, a low of 799 in February, 2017
    • a high of 955 in the most recent month, May, 2018
  • not graphed, but the trend for the past four months has been up 
    • January, 2018: 853
    • up 48 in February, 2018, 901
    • up 15 in March, 2018, 916
    • up 26 in April, 2018, 942 
    • up 13 in May, 2018, 955
Inactive wells:
  • in data presented, we have never gone above 1,700 inactive wells
  • number of inactive wells in the past three months are among the highest numbers in the data presented

Disclaimer: in a long note like this and with so many numbers, and no triple-checking and no NYT fact-checker, there will be factual and typographical errors.