Saturday, September 15, 2018

Top Stories Of The Year -- 2018 -- Final Draft -- In Progress

Final draft. Final post within the next couple of days.

Top stories by month for the year, 2018, are linked here.

The Bakken, 2018. Summary.

Permits in North Dakota, by county, by field, by operator.

********************************************

Elevator speech: the stories that dominated the Bakken in 2018:
  • the Bakken is back! 
  • North Dakota oil production hits new all-time records
Internationally, the big energy stories impacting the Bakken in 2018:
  • western Canadian sands remains landlocked
Nationally, the biggest story to affect the oil patch: we still have a pro-oil president in office

National, energy: the natural gas story

******************************
Top Stories Of 2018
By Category
 
Top Story of The Year: the incredible US economy, both on Main Street and Wall Street

Runner-up: US becomes net exporter of crude oil / petroleum products for first time in 75 years; US takes top spot in crude oil production; surpasses Russia, after surpassing Saudi Arabia earlier

The world: Khashoggi; Canada curtails crude oil production;

Most surprising story of 2018: Paris burns;

The most egregious story to come out of the Bakken: ND's "high water mark" land grab

The US: second longest economic expansion in history recorded; on track to become the longest;

North Dakota, energy: natural gas production, flaring records;

North Dakota, energy, runner-up: new Liberty pipeline announced

North Dakota economy:
  • Legacy Fund deposits hitting recent highs
  • ND taxable sales and purchases, 3Q18;
North Dakota, technology:

Most exciting small non-operator in the Bakken: NOG;

Most exciting micro operator in the Bakken: Kaiser-Francis

Most exciting small operator in the Bakken: Bruin

Most exciting medium operator in the Bakken: Oasis

Most exciting large operator in the Bakken: MRO

Biggest deal: MPC buys Endeavor

Most surprising deal: DNR swaps almost 200,000 acres in the Bakken for about 80,000 acres in the Permian.

Record price per Bakken mineral acre, 2018: NOG buys 10,600 acres for $300 million ($28,000 / acre); PetroShale, $30K/acre;

Bakken operations, rigs: the number of active rigs at a 4-year high
Bakken operations, production: North Dakota crude oil production hits all-time record, July, 2018

Bakken operations, density: operators permitting for double-digit number of wells in 640-acre spacing

Top prediction for 2018: Lynn Helms opines "huge production jump" in autumn of 2018

Biggest story in takeaway capacity: new Liberty pipeline announced

CBR: rumors that LNG by CBR could be the next big railroad story

Pipeline: new Liberty pipeline announced, from the Bakken to Corpus Christi

Flaring: NDIC relaxes guidelines; ND sets natural gas production, flaring records;

Natural gas: announcement -- another $3 billion in North Dakota natural gas infrastructure for 2019

Refining: Davis refinery near the park is still on-track;

Investment story of the year: shorting the price of oil;

The "other" Williston Basin formations:

Bakken economy (too many to list): new Williston airport remains on track

Miscellaneous::Bald eagles make astonishing comeback in North Dakota

Top Operator Of The Year: MRO -- 2018

The Bailey oil field is tracked here. Unless some other operator surprises me in the last three months of this year (2018) it's going to be hard to name some operator other than MRO "The Operator of the Year for 2018."

See this post, also.

Look at the run of incredible wells by MRO in Bailey oil field (below).

In addition, MRO appears to have the most aggressive re-frack program in the Bakken.

The wells (50K+ means the well had at least one month of 50,000 bbls of oil production or more):
  • 33599, 5,000, MRO, Gravel Coulee 14-11TFH, Bailey, 45 stages; 7.9 million lbs, t6/18; cum 64K in 47 days;
  • 33598, 3,473, MRO, Rita 41-3TFH, Bailey, t5/18; cum 85K 7/18;
  • 33597, 3,514, MRO, Stanton 41-3H, Bailey, t5/18; cum 96K 7/18;
  • 33583, 5,694, MRO, Sundby 24-11TFH, Bailey, 45 stages; 8.6 million lbs, t6/18; cum 78K 7/18; 50K+ well;
  • 33582, 5,305, MRO, Morriston 24-11H, Bailey, t6/18; cum 68K 7/18;
  • 33581, 6,573, MRO, Olea 24-11TFH, Bailey, 45 stages; 11.78 million lbs, t6/18; cum 75K 7/18; 50K+ well;
  • 33580, 3,276, MRO, McFadden 14-11H, Bailey, t6/18; cum 50K 7/18;
  • 33535, 6,204, MRO, Arkin 44-12TFH, Bailey, 45 stages; 6.0 million lbs, t1/18; cum 227K 7/18;
  • 33534, 5,113, MRO, Bronett 14-7H, Bailey, t1/18 cum 203K 7/18;
  • 33443, 4,152, MRO, Marlene 34-11TFH, Bailey, t6/18; cum 67K 7/18;
  • 33437, 3,115, MRO, Tipton 34-11H, Bailey, t6/18; cum 47K 7/18;
  • 33436, 4,491, MRO, Gifford 34-11TFH, t6/18; cum 65K 7/18;
  • 33435, 4,538, MRO, Hugo 34-11H, Bailey, t6/18; cum 65K 7/18;
  • 33403, 3,484, MRO, Stroup 34-7TFH, Bailey, t2/18; cum 175K 7/18;
  • 33402, 3,040, MRO, Bethol 34-7H, Bailey, t2/18; cum 170K 7/18;
  • 33401, 3,161, MRO, Kenneth 24-7TFH, Bailey, t1/18; cum 170K 7/18;
  • 33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 178K 7/18;
  • 33326, 1,814, MRO, Spring 21-15TFH, Bailey, t11/17; cum 73K 7/18;
  • 33325, 5,072, MRO, Chapman 31-15H, Bailey, 45 stages; 8.6 million lbs; t10/17; cum 244K 7/18; 50K+ well;
  • 30550, 4,516, MRO, Brush 24-8H, Bailey, 45 stages; 8.8 million lbs, t9/17; cum 227K 7/18; 50K+ well;
  • 33324, 2,282, MRO, French 31-15TFH, Bailey, t10/17; cum 166K 7/18;
  • 29630, 5,644, MRO, Clarice USA 14-9H, Bailey, 45 stages; 8.3 million lbs, t9/17; cum 299K 7/18; 73K in first month -- only 28 days; 

Finally, The Buelingo Makes Sense -- September 15, 2018

This one has been driving me nuts. I've been following it for months (years, it seems) and could never explain the jump in production despite the fact that it had not been re-fracked.  See production profile below. See this post; and, here.

Finally the answer -- in this graphic:



The well:
  • 19397, 417, CLR, Buelingo 1-20H, Elm Tree, t3/11; cum 309K 7/18; production profile --
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2018313242311038201174811199147
BAKKEN6-20182623322143235396858569788
BAKKEN5-201829405643363757156291532685
BAKKEN4-2018191654166494645044241148
BAKKEN3-2018319140924265642597325118641
BAKKEN2-20182814138141721107633829294264179
BAKKEN1-20183120892211181504238788369021638
BAKKEN12-20173126355262142335946285444111627
BAKKEN11-2017325481923143332072656534
BAKKEN10-20170000000
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-20170000000
BAKKEN4-2017002100000
BAKKEN3-20170000000
BAKKEN2-2017227247131801470122670
BAKKEN1-201731112912024452163182293
BAKKEN12-201630144012134412228194651
BAKKEN11-20160000000
BAKKEN10-201626188420693633539326178

Going Biking

Off the net for awhile.

For those who do not understand LNG (and that includes me), the post I just completed should be helpful.

I wish I could hang around and do some more blogging, but lots of biking, lots of errands.

I may not be back on the blog until late this evening.

There will be lots of factual / typographical errors to fix.

Disclaimer: this is not an investment site.

Disclaimer: I am inappropriately exuberant about the Bakken.

Fact: North Dakota just set four all-time records in the oil patch.

For newbies: it is impossible to convey how incredible the US oil and gas sector is right now. There's no question in my mind that we would not be where we are had it not been for the policies President Obama set in place during his tenure. He was absolutely correct: "We just simply can't drill our way to lower oil prices."

He was right. It wasn't simple. The oil sector needed some really well-trained and dedicated roughnecks and truckers who were willing to show up to work 24/7 during some of the worst North Dakota blizzards ever.

The oil companies needed hundreds (thousands?) of incredibly well-trained geologists coming out of engineering programs across the entire US (and a few from overseas, I suppose).

It required CEOs, bankers, investors willing to invest like drunken sailors. (Sorry, if I insulted anyone, and I probably did.) The risks they took were incredible. Some lost big; some are winning bigly.

It required an incredible partnership among state officials, oil companies, individual landowners, individual mineral owners several generations "deep."

And, the technology -- drilling two miles deep; turning on a dime -- going horizontal for two miles, all through a seam maybe 40 feet thick but a 2-foot target, and total vertical depth measured to the nearest inch after going down two miles.

No, I don't think it was simple. Barack was right. It's not simple.

The easiest thing President Obama could have done was approve the DAPL but he left that to President Trump to make the latter look good and keep his campaign promise to make America great again.

Comments are disabled. Too much spam.

I won't get to my e-mail until later this evening.

The plural of "haiku" is "haiku." It follows neither the Greek nor the Latin rules for plurals.

Pluralism means something completely different.

And the New York Times spells "fracking" with a "k."

The other day I typed the Washington Post as "Washington Pos. I'm not sure that was a typographical error.

Going biking.

Good luck to all.

By the way, there are 73 really, really smart people reading the blog. Thank you.

LNG: Tons, Tonnes, Cubic Feet, Cubic Meters, Million, Billion, Trillion, M, MM, B, T; And The Number Of Angels Dancing On The Head Of A Pin

Updates

Later, 5:47 p.m. CDT: back to more serious matters. For everyone, quick, what was the estimate for natural gas (dry) in the Bakken in the USGS Survey of 2013? From the survey:
Gas estimates ranged from 3.43 Tcf (with a 95% chance of production) to 11.25 Tcf (with a 5% chance). 
For newbies, the USGS is always considerably conservative.

The Bakken is currently producing 2. 4 billion cubic feet per day (bcfpd). In a year, 365 x 2.4  = 876 billion cubic feet.

Rounding, about 1 trillion cubic feet/year currently? Assuming the math is correct (a huge assumption).

The USGS 2013 Bakken survey:
Gas estimates ranged from 3.43 Tcf (with a 95% chance of production) to 11.25 Tcf (with a 5% chance). 
The Zohr? See this post. Thirty trillion cubic feet. The operator plans to max out at 2.9 billion cubic feet day. That works out to be about thirty years of production. Amazing how the law of large numbers always seems to work out.


Later, 5:29 p.m. CDT: a reader thanked me for clarifying LNG and how it's measured and sold. The reader said, that with regard to angels dancing on the head of a pin, more information was needed --
If the angels are in Texas doing the Cotton-Eyed Joe, each angel will need her very own pin (;>)  Same would hold true for polkas at a ND wedding dance.

For less exuberant dancing, more information is needed:
  • are their wings retracted within the silhouette of their bodies?
  • ditto haloes?
  • will each pin be devoted to a certain type of dance?  e.g. couples dancing a waltz will occupy less room than a bunch of individuals doing a line dance
  • if pow-wows are included, where do we put the drum?
  • inevitably at the end of the evening, somebody's gonna want to limbo, so we'll need specs on the limbo pole.
With regard to the "drum" we need to know the number of angels in the "drum group." Generally there are four members in a drum group but the groups can be far larger -- requiring a second pin, perhaps. As for placement, except in Oklahoma where the drum is in the center of the dance floor, the drum would be on the large circle between the inner circle of dancing angels and the outer perimeter of spectators.

And, once again, down a rabbit hole ...

 
Original Post

See this post from LinkedIn.

This is a long, long post, but I think the best bit was this, and yes, the writer actually says it ... near the bottom of the post, and I quote verbatim:
The question I always get is how long does one TCF of gas last? The answer depends on ... how fast you take the gas out of the reservoir. 
LOL. I haven't had so much fun since I read Art Berman's analysis of the shale revolution.

I may have posted this years ago. I don't know. If not, I should have. From Bharat (Bob) Shah over at LinkedIn, he begins:
If you are associated with any aspect of an LNG plant, you know that the LNG plant capacity is always specified in tons per year. And that the LNG onshore storage is always in cubic meters and so is capacity of LNG carriers. And then LNG is sold on dollars per MMBTU. The heating value is in BTU/SCF. The gas flow coming in the plant is referenced in MMSCFD and the reservoir capacity is TCF. 
And that's the problem:
  • LNG plant capacity: tons per year
  • LNG onshore storage: cubic meters
  • LNG carriers: cubic meters
  • LNG is sold: on dollars per MMBTU
  • heating value: BTU/SCF
  • gas flow in the plant: MMSCFD
  • reservoir capacity: TCF
  • size of the head of a pin: measured in the number of dancing angels
So, Bob makes it very, very simple:
  • Basis: one train, in his example, has an annualized 5 MPTA or 5,000,000 tons/year or 5 million tons or, I suppose, 5MM tons, or maybe 5 M tons 
  • So, back to the 5 MPTA = 571 tons / hour   (divide 5 million by the number of hours in a full year, 8,760 hours in a full year)
  • 571 tons/hour = 1.26 MM (yup, all of a sudden we have switched to "MM") lbs/hour
  • 1.26 MM lbs/hour = 75,449 Lb-Moles/Hour  (I can't make this stuff up, a quick switch from "lbs" to "Lb-Moles" -- which for a moment I thought was lobster-moles)
I assume we're about to get to the number of angels dancing on the head of a pin.

So, a few more calculations, and we get to, and I can't make this up either, 1TCF approximates (we've been using "equal" signs until now, but now it's an approximation) 18 MM tons of LNG

Why the approximation? Because of the following assumptions:
  • feed gas composition, CO2, H2S, N2, H2O content in wellhead gas and efficiency of refrigeration compressor drivers, gas density; etc
  • and a bunch of other things
Another assumption: US $8 / MM BTU (this was back in 2016).

Okay, let's move on.

This next comment is refreshing: "The conversion from tons to cubic meters is simple." Well, perhaps not:
The onshore storage and the LNG carriers have a fixed capacity just as for any other liquid storage systems. This capacity is always measured in cubic meters. Why not in barrels or cubic feet, one may argue. It has always been in cubic meters and majority of LNG customers use metric measurements. The conversion from tons to cubic meters is simple. (Interestingly enough, I don't think Bob actually shows the "conversion." Instead, he jumps into the issue of shipping).
Let us say one LNG tank has a capacity of 180,000 cubic meters. So the tank holds 81,000 tons of LNG. [Bob: "You do the math."]
At 571 tons per hour of LNG production per hour per train, it holds 142 hours of LNG production.
Most LNG plants have at least two LNG tanks. Some may be a bit smaller in capacity.
Unlike crude oil tank farms, one can’t justify LNG tank farm as the LNG tanks are very expensive (LNG is stored at minus 260 deg F).
In order for LNG train(s) to keep running, the LNG must be loaded into carriers regularly. The typical LNG customer will be thousands of kilometers away from the LNG plant. The LNG carriers move slowly at about 20 knots, so several LNG carriers must be on their way to ensure onshore tanks are available for continuous LNG production. It is not profitable to curtail LNG production because the next carrier is still a few days away. The LNG shipping logistics is very complicated and must be worked out along with lining up LNG purchasers.
Okay. Now, all of a sudden, a new way to measure LNG: "TCF stands for trillion cubic feet of gas. BCM is also used and it stands for billion cubic meters."
TCF stands for trillion cubic feet of gas. BCM is also used and it stands for billion cubic meters. One bcm equals 35.2 bcf or billion cubic feet.
Gas reservoir capacity is usually referred in TCF.
The question I always get is how long does one TCF of gas last? The answer depends on the composition of the gas and how fast you take the gas out of the reservoir. The heavier components have to be removed before liquefaction but they count in the reservoir capacity. In addition, there will be other impurities and gases such as CO2, H2S etc. On my last project, the reservoir capacity was known to be 120 TCF. Our Hysis runs for a case indicated that one TCF of wellhead gas produced about 18 million tons of LNG. For the two 5 MPTA trains, the reservoir had enough gas to last 216 years. So there was plenty of gas for more trains. And the project did consider plans for future mega trains that would give total LNG park capacity to 100 MPTA. Without making adjustment for NPV, the 100 MPTA Park and 120 TCF corresponds to 840 billion dollars of LNG.
In his next post: how many angels dance on a head of a pin? Assumptions:
  • the pin is the standard dressmaker / all-purpose pin (not needle)
  • length of the pin does not matter
  • angels are the standard size as measured before  the Fall
  • the angels' average separation correlates with "circular" arrangement seen in The Nutcracker and not the linear arrangement patented/trademarked by the Rockettes

Week 37: September 9, 2018 -- September 15, 2018

July, 2018, oil and natural gas data for North Dakota: four new all-time records set.
  • crude oil production; sets an all-time record and jumps 3.4% month-over-month
  • natural gas production: sets an all-time record, and even out-producing the largest gas field in the Mediterranean; in the Bakken, natural gas is an irritating and dangerous by-product
  • boepd production: sets an all-time record
  • number of producing wells in North Dakota: despite a quarter of the number of active rigs in July compared to the height of the boom, North Dakota has more producing wells than ever
  • other notes of interest:
    • there are still about 900 DUCs -- wells that have been drilled to depth but for some reason or another, the oil company has decided to postpone completion of the well -- many, many reasons will be given, but I consider the companies simply "managing their assets"
    • the number of inactive wells actually increased slightly month-over-month -- this is also not unexpected in Bakken 2.5
US economy: setting all-time records; small business optimism breaks all-time break; exceeds that seen during the Reagan administration; Trump economy making Connecticut great again;

International
  • Saudi Arabia: internal bickering likely scuttled the Aramco IPO once and for all (it would have died regardless); will focus on petrochemical dynasty
  • Global warming: NASA confirms that 410 is the "Goldilocks" number: CO2 greening the earth; Africa a beneficiary of the phenomenon
National 
Canada
*****************************
Back to the Bakken

Operations
Record IP in the Bakken?
CLR's Mountain Gap wells simply amazing; updated earlier;
Jump in production; and, here;
EOG well hits one-million-bbl threshold; and, another one here;
New activity regarding the CLR Whitman wells?

Bakken 2.5
Re-fracking: MRO in the Bailey  

CBR
LNG?

Flaring:
Worsens in North Dakota; NDIC authorizes a study to consider underground storage of NG

Natural gas processing:
ONEOK looking at the biggest plant yet?http://themilliondollarway.blogspot.com/2018/09/oneok-north-dakota-update-september-8.html

Other formations
White Rock Oil & Gas re-enters, re-completes an old Duperow well
Random update of an old, old CLR North Red River B well
Targeting the Madison

Refineries
Administrative judge opines the "refinery near the park" can go forward

Bakken economy (link here)
Multi-family housing (apartment units, 4-plexes, duplexes) reach capacity in Williston
United Airlines will add a fourth daily Denver-to-Williston flight
Williston school districts enrollments continue to climb
Two new veterinarians set up practice in Watford City