Friday, September 14, 2018

US DOE Authorizes Freeport LNG Exports -- September 14, 2018

Surf Medley, Junior Brown


This is a pretty cool story, though the article seems hard to read/understand (at least for me). But in the two graphics below, only three Freeport LNG trains are shown/planned at the time the graphics were first produced; in the new story, Freeport LNG has authorization for a fourth train; has some commitments; needs more

US Department of Energy authorizes Freeport LNG exports. Link here. Hard story to follow the way it is written.
  • DOE authorizes Freeport LNG to export up to 2.14 billion cubic feet from Texas facility
  • a "short-term order" provides Freeport flexibility in obtaining necessary funding to continue with project
  • will eventually get long-term authorizations from DOE (that's what TransCanada Keystone XL folks said -- ouch!)
  • last week: Freeport LNG announced 2.2-million-ton-over-20-year deal with Japan
  • that deal (apparently the just-announced DOE short-term authorization, but not sure) will go into effect in 2023 when the fourth liquefaction train at the Freeport facility is due to be completed
  • will have annual capacity of 3.5 million tons of LNG
  • Freeport LNG needs to find long-term commitments for another 1.3 million tons of LNG to guarantee the construction of the fourth train
  • the first train should be operating by the end of 2019
  • currently, the only two operating LNG export facilities in the US are Sabine Pass and Dominion Cove with a combined capacity of 3.5 billion cubic feet of gas daily
  • so far, the US has approved long-term LNG export contracts to the tune of 21.35 billion cubic feet of gas daily
    • 21 x 365 = 7,665 billion cubic feet annually
  • US exports of LNG began in 2016; total production since then has reached the equivalent of more than 1.3 trillion cubic feet of natural gas
  • I can't even begin to count the ways that story as written is confusing
    • short term deal or long term deal goes into effect in 2023
    • first train, fourth train mentioned; what happened to 2nd and 3rd trains
    • tons vs tonnes vs million, billion, trillion cubic feet
    • "total production" since 2016 vs exports?
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Background

Where does the US stand now?

From previous posts regarding US LNG export facilities.

List of potential US LNG export facilities -- compiled by RBN Energy -- back on October 12, 2016.

EIA: US liquefaction capacity additions by project and train, release date -- March 2, 2017. This is pretty cool: the graph below shows three trains for Freeport LNG; the story above reflects a fourth train for Freeport LNG;


LNG export terminal projects -- update in one graph, from this post:

Bakken 2.5 -- Inactive Wells Increase Month-Over-Month -- September 14, 2018

An interesting phenomenon, the number of DUCs in blue: inactive wells in black/bold. So, after five consecutive months of the number of inactive wells dropping, the number of inactive wells increased month-over-month in the July, 2018, data.

July, 2018: 943, down 50 from previous report
inactive: 1,486, up 28

June, 2018: 993, up 38 from previous report
inactive: 1,458, down 111

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

Skimming Pool

Shout Out To Art Berman And Jane Nielson: Three All-Time Records Set In The Bakken -- September 14, 2018

Director's Cut -- July, 2018 Data

Shout-out to Art Berman and Jane Nielson.

Halloween just around the corner?


Sea of Heartbreak, Zombina and the Skeletones

Link here: for links to NDIC and the Director's Cuts. And to Art Berman's "shale is a retirement party."

Disclaimer: the Director's Cut summary that I try to do every month is done very, very quickly. There will be typographical and/or factual errors. That's why I have the link. If this information is important to you, go to the link.

Natural gas: the biggest natural gas field -- remember, we're talking about a natural gas field -- in the Mediterranean is producing 2 billion cfpd (the Zohr gas field here). Meanwhile, North Dakota, an oily play for all intents and purposes, where natural gas is a hassle, a danger, and a by-product, is producing 2.4 billion cfpd (assuming I'm doing the math right - which is a big assumption).

Red Queen? Hardly: The drilling rig count was up three from June to July, decreased five from July to August, and is currently up four from August to today.

Flaring: I was under the impression that the NDIC was going to stomp on operators this month if they didn't get the flaring issue under control. Flaring worsened, see below. And, yet, the state allowed a significant increase in the number of wells to be completed.

The number is: 1,269,366 bbls/day
  • Crude oil: 1,269,366
  • Natural gas: 2,400,174 MCF/day = 399,962 boepd
  • Total: 1,669,328 boepd
    • Previous record (last month): 1,608,797
    • Previous record (previous month): 1,632,024 boepd
Crude oil production:
  • July, 2018: 1,269,366 bbls/day
  • June, 2018: 1,227,320 bbls/day
  • May, 2018:  1,246,355 bbls/day (all-time high was 1,227,483 bbls/day back in December, 2014)
  • Delta, month-over-month: + 42,046 bbls; UP 3.4% month-over-month
Natural gas production:
  • July, 2018: 2,400,174 MCF/day (399,962 boepd) -- another new all-time record
  • June, 2018: 2,300,103 MCF/day (383,287 boepd) -- string of new records broken
  • May, 2018: 2,315,391 MCF/day (385,834 boepd) -- a new all-time record
  • April, 2018: 2,242,093 MCF/day (374,000 boepd) -- record at the time
  • March, 2018: 2,119,751 MCF/day (353,000K boepd) -- record at the time
Well Completions:
  • July, completions, preliminary: 106
  • June, completions, preliminary: 63 (preliminary): actual - 70 (final)
  • May, completions, preliminary: 42 (preliminary); actual -- 72 (final)
  • April, completions, preliminary: 69 (preliminary); actual --> 86 (final)
  • March completions: 75
  • February completions: 74
  • January completions: 65
DUCs + inactive wells:
  • July, 2018, DUCs and inactive wells: 2,429
    • DUCs, waiting on completion: 943, down 50 from the end of June to the end of July
    • inactive well count: 1,486, up 28 during same time period
  • June, 2018, DUCs and inactive wells: 2,451
  • May, 2018, DUCs and inactive wells: 2,451
  • see "DUC commentary," dated June 29, 2018 
Flaring:
  • statewide: 82% (down 1% from last month)
  • statewide, Bakken: 84% (unchanged from last month)
  • FBIR Bakken: 76% (down 3% from last month) -- federal; atrocious, compared to state
  • ND goal: 88% capture; increasing to 91% beginning November 1, 2020
Missing comment of interest:
  • Anything new about flaring?

Feeling Snarky On A Friday Night -- September 14, 2018

Florence: Almost immediately the storm of the century, the one the Washington Post said was caused by President Trump, after hitting landfall, downgraded to a tropical storm (i.e., a rainstorm). All this hype. It hits the coast at barely category 1, and then immediately to tropical storm.

One big rainstorm: see video. See Hurricane Floyd, 1999.

Blizzards in North Dakota are routinely worse. I vividly recall how little national attention was given to the ranchers in South Dakota during a particularly severe blizzard.

Good news for the NFL. One less competitive distraction this weekend.

[Later, playing politics or television ratings with Florence:
Florence may not have been a Category 4 to start with. Some AGW weather and climate “scientists” are reading the wind speed off the top of the clouds. This is notoriously inaccurate. When a hurricane hunter punched through the eyewall with instruments to correctly read wind and pressure, suddenly it was a 3/2 hurricane. When it was just offshore some U.S. weathermen were still calling it a Category 4 when it had dropped to a 2. Until Florence came within range of an aircraft, all you could accurately say is it was big and had a lot of moisture in the clouds. There was nothing really record-breaking in the flooding, either. Weatherman Joe Bastardi easily named off several hurricanes that caused more severe damage in that region.]
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Back to the Bakken

Flaring: I was under the impression that the NDIC was going to stomp on operators this month if they didn't get the flaring issue under control. Flaring worsened, see July, 2018, data, at the "just-released" Director's Cut. And, yet, the state allowed a significant increase in the number of wells to be completed.

Director's Cut: posted. A shout-out to Art Berman and Jane Nielson.

Bismarck Tribune: feeling proud to be from North Dakota. Harold Hamm, et al, keeping North Dakota great.

A trifecta: back in July, 2018, from The Bismarck Tribune.

Another trifecta for July, 2018:
  • North Dakota crude oil production: new all-time record: 1.268,366 bopd 
  • North Dakota natural gas production: new all-time records -- several months of consecutive, new all-time records
  • North Dakota producing wells: a new all-time record
Active rigs:


9/14/201809/14/201709/14/201609/14/201509/14/2014
Active Rigs65553468199

No new permits.

Six producing wells (DUCs) reported as completed:
  • 32260, 507, Statoil, Enderud 9-4 7TFH, Banks, t8/18; cum --;
  • 33388, 165, Crescent Point Energy, CPEUSC Paopao 7-35-26-158N-100W TFH, Dublin, t8/18; cum --
  • 33389, 261, Crescent Point Energy, CPEUSC Paopao 6-35-26-158N-100W TFH, Dublin, t8/18; cum --
  • 33392, 267, Crescent Point Energy, CPEUSC Paopao 5-35-26-158N-100W TFH, Dublin, t8/18; cum --
  • 33386, 239, Crescent Point Energy, CPEUSC Paopao 4-35-26-158N-100W MBH, Dublin, t8/18; cum --
  • 33387, 230, Crescent Point Energy, CPEUSC Paopao 3-35-26-158N-100W MBH, Dublin, t8/18; cum --
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Bakken Dilemma:

You have two elephants in the room. How do you deal with them?
  • one elephant: flaring is getting worse, not better in North Dakota
  • second elephant: if you "enforce" flaring guidelines with current infrastructure constraints, oil income to the state falls; and oil income to royalty owners (voters) falls -- and there's a mid-term election this autumn
So how do you handle the two elephants?

Yup, you guessed it. Form a committee to study the problem.

Williston Economic Development -- Weekly Summary -- September 14, 2018

Airlines: United Airlines will add another flight between Williston and Denver, beginning January 7, 2019. The airline's fourth daily fight will arrive Williston at 10:50 a.m. and will depart for Denver at 12:15 p.m.

Multifamily housing in Williston nears capacity. Occupancy for one major operator stands at 92%.

Williston school enrollments continue to climb. District 1, at 4,361, up from 4,100 at the end of last year. The largest class (K - 12) is first grade with 370 students.

Veterinary service in Watford City: two new veterinarians recently joined the Watford City Veterinary Center.

The Energy, Market, And Political Page, T+33 -- September 14, 2018

We've talked about this often. I was sort of involved in a very, very small part of this research back in 1975 or thereabouts in Utqiagvik, Alaska. I was studying photosynthesis of plants on Alaska's North Slope.

From this link:


Wells I No Longer Follow -- September 14, 2018

This is simply some housekeeping. Nothing new here. This has all been posted before. The page where this came from was getting too long. These are wells that I was watching for some reason or other; once I saw what I wanted to see, I "closed" them out.

For wells still being followed, click here.
Page 9




July 27, 2018: check later, 2018 -- #16860, #17498. See this post. #16860 with huge jump in production, 6/18; #17498 still off-line, 6/18; back on line; huge, huge well (#17498 -- re-fracked)
 
October 13, 2018: #33701; coming back on line after neighboring well fracked; see this post; will be followed here;

October 21, 2018: #17082, just came back on line; a great well; perhaps small increase; not remarkable;

June 9, 2018: 18365, 1,379, EOG, Liberty 8-01H, Van Hook, Bakken; t7/10; cum 334K 4/18; far to the south, EOG has three wells on DRL status and they will run parallel to #18365: #33019; #33020; #33021; see this post;

June 6, 2018: 20325, IA/2,846, BR, Midnight Run 21-1MBH, Union Center, Bakken, t12/11; cum 287K 4/18; off-line as of 12/17;

September 24, 2018: #21962, MRO, Vance Strommen ..., Killdeer, just coming back on-line 7/18; slight jump in production 8/18; not remarkable;

March 15, 2018: #20351, near this well, recently fracked; when back on line, unremarkable.
  • 33656, 1,100, GO-Vinger-156-98-2116H-2, Wheelock, t3/18; cum --
March 25, 2018: #19291 taken off-line, January, 2018; none of the other wells in that section off-line; back on line 5/18; not remarkable.

September 23, 2018: #21813, MRO, Garry Sampson ..., Murphy Creek, off-line as of 5/18; back on-line as of 8/18; not remarkable;

December 31, 2017; #20208, #20210, #20211; nearby new frack; see this post; updated here.
June 6, 2018: 20325, IA/2,846, BR, Midnight Run 21-1MBH, Union Center, Bakken, t12/11; cum 287K 4/18; off-line as of 12/17;

June 25, 2018: the Kennedy-Miles wells; start with #33220; IPs have been reported but initial production has not yet been reported;

September 24, 2018: #21962, MRO, Vance Strommen ..., Killdeer, just coming back on-line 7/18; slight jump in production 8/18; not remarkable;

September 23, 2018: #21813, MRO, Garry Sampson ..., Murphy Creek, off-line as of 5/18; back on-line as of 8/18; not remarkable;

March 25, 2018: 19246: 28590 (huge jump); 28589 (off-line); 28588 (huge well). #28588 -- huge jump 1/17 and not re-fracked (FracFocus).

September 24, 2017: #16846, EOG, off-line; a big well; activity in the area? nope, I don't see any reason for this well coming off line. Said to be IA with no explanation; now back on line; will watch for a couple of more months; last update, 12/17; low production since coming back on line; struggling, 5/18; off-line again 6/18; still off-line, 7/18; on-line as of 8/18, but poor production;

June 5, 2018: 18172, 112, EOG, Fertile 35-23H, a Three Forks well;  t9/09; cum 142K 4/18;

July 22, 2018: 24518, SI/NC, Slawson, Gabriel 6-36-25TFH, North Tobacco Garden, no production data, (#32617, #21250, #24521); see this post;

June 29, 2018: check production data; and frack data: #33120, #33121; they come off confidential list August 25 and August 27, respectively

October 22, 2017: #21600, 838, CLR, Rochester 1-24H, North Tobacco Garden, t1/12; cum 266K 3/18; frustratingly, since early 2017, this well has had a steep decline in production; taken off-line 6/16; is something going on? tracked here; re-checked and now I see production is back up to 3,000 bbls/month as of 10/17; no sundry form to explain what was going on; work-over rig? Off line 5/18; finally back on line 7/18 and nice production;
 
March 28, 2017: #19516; watch for halo effect; check back in a few months; still off-line as of 12/17; on one or two days occasionally; said to be A 5/18; but no production in 5/18; appears to be IA (5/18); now IA (6/18); back on line; small jump in production;

March 6, 2018: 32589, 1,412, Whiting, Koala 21-2TFHU, Poe, 4 sections, t2/18; cum 41K 3/18; (#19961, #20383, #23673, #23671, #23672.):
  • 19961: small jump in production;
  • 20383: ditto
  • 23673: unremarkable
  • 23671: ditto
  • 23672: small jump in production;
August 25, 2018: 16333, MR0, re-fracked 4/18; come back to this; off-line 3/18; remains off-line 8/18; neighboring well, #16860, off-line same time; still off-line 8/18; neighboring well a TFH well, #30266, not taken off-line during this period, huge production -- 117K in 3.5 months; see this link;

August 2, 2018: 32010, 7,448, MRO, Colvin USA 14-34TFH. Note the IP. Five more wells on same pad soon to be reported. See this post. Also, this post.

July 23, 2018: 16758, MRO, a nice well; off-line 5/17; back on line 9/17; not much increase; I noted that this well just went off-line 4/18 and is completely offline as of 5/18; something going on? listed as IA; #18196, in the next section to the west, is also off-line to some extent; 6/18 back on status; unremarkable; 18196 back on line (6/18) -- unremarkable.

March 17, 2018: 29209, IA/2,776, MRO, Ernestine USA 11-14TFH-2B, why did this well go IA 1/18? #34100 - 34104, inclusive all SI/NC; the 4-well pad: 29208 - 29211 on one pad; see this update


March 2, 2018: #27435 -- an interesting production profile; Bruin;

March 7, 2018: 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 12K over 7 days; (#16654, #16993, #17797, #18382). Update this post.

February 16, 2018: check on these two wells in about six months, #16993, #17797; a neighboring MRO well reported an IP of 6,204 on this date; see this post for updates;

December 31, 2017: as planned, Sedalia drilled two new re-entry laterals off 29854. I follow #29854 here.  Seems unremarkable.

November 28, 2017: follow-up in about a year. #17582, Mimir Uran. . Off-line as of 12/17 (5/18); now, 8 days in 6/18 but minimal production; back on line; halo effect; post here;

August 15, 2018: completed DUCs with huge IPs (33550, 5,898; 33549, 5,284; 32012, 7,151; 33562, 4,882). In a couple of months check frack data.

January 23, 2018: #19397, Buelingo; neighboring well fracked. Update: huge jump; must see; this link. But more importantly, check out this well, #19503, and note how far it is away from any frack, including the fracks that would have affected #19397. 

September 14, 2017: eight Enerplus wells in Spotted Horn; check back in six months or so; as of 6/18, two new wells have now been completed and results are posted; the others are still SI/NC but are showing production runs; as of 3/18; now back on conf and producing;

Morning Note -- September 14, 2018

Florence: 6:04 a.m. Friday morning, September 14, 2014, the eye of the storm has hit the barrier islands but I don't think the eye has actually gotten halfway over the coast -- could be wrong -- but wow is this category 1 rainstorm moving slowly. 

Top story of the year for ND ranchers? Two readers sent me this story -- first from The Dickinson Press; the second from, well, the same source. For the first time in decades, despite heavy tariffs, US beef will now be sold in China. Data points:
  • despite the tariffs, ND ranchers are excited
  • this never, never happened under Obama -- ND ranchers seeing opportunity of Chinese market
  • Chinese tariff on US beef three times that of Australia's tariff
  • even a $30-increase in cattle prices could see a US beef market boom on par with that of the early 20th century
  • two lost decades: the US has been locked out of China for 13 years -- that means the "lock-out" begun under Bush II and continued under Barack "we can't just drill our way to lower oil prices" Obama
  • OECD, annual assessment: beef will become the fastest-growing import sector in China over the coming year, with China continuing to top the world meat consumption rankings annually
  • from the first reader: last fall, the Chinese signed a $300 million deal with Montana ranchers to purchase beef and build a packing plant
  • not a single pound of US beef was sold to the Chinese under the Obama presidency
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Back to the Bakken

Wells coming off confidential list today -- Friday, September 14, 2018 --
  • 34146, SI/NC, BR, Sanvan 1A-MBH-ULW, Elidah, no production data,
  • 33735, SI/NC, Hess, BB-Federal B-151-95-2122H-10, Blue Buttes, no production data,
Sanvan, #34146 -- busy, busy, busy



For newbies: check out #21541.

Active rigs:

$68.819/14/201809/14/201709/14/201609/14/201509/14/2014
Active Rigs65553468199

RBN Energy: Pemex and Shell renew their Deer Park vows, with a twist, part 2. Reminds me a lot of Motiva.
Any joint venture has its pros and cons for each party, and in an ideal world, everyone involved in a JV sees net benefits from pairing up with a partner. A quarter-century ago, state-owned PetrĂ³leos Mexicanos (Pemex) purchased a 50% stake in Shell’s Deer Park, TX, refinery. The JV partners also entered into a 30-year processing agreement under which each would purchase half of the refinery’s crude feedstock and own half the output. Separately, Pemex agreed to supply as much as 200 Mb/d of Mexico’s heavy sour Maya crude to Deer Park and Shell agreed to supply Pemex with 35-40 Mb/d of gasoline to help meet Mexico’s refined products deficit. The partners recently agreed to an early extension of the deal by 10 years from 2023 to 2033, while reducing the supply of Maya crude after 2023 to 70 Mb/d, to be sold at a fixed price. Today, we continue an analysis of the JV and the new changes to it.
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First Dental Check-Up









She was still holding her new toothbrush -- package unopened -- and her "adult" toothpaste when I saw her several hours later.

Pretty Little Angel Eyes, Curtis Lee