Sunday, January 20, 2019

DUCs -- It's Complicated -- January 20, 2019

Nick Cunningham over at oilprice suggests that DUCs will make crude oil production hard to forecast going forward. One could argue that's been a problem for quite some time.

I doubt we will ever be able to find out who coined the "DUC" acronym but without a doubt Lynn Helm was the first to use it on a regular basis when talking about the Bakken. DrillingInfo takes the acronym back to 2014, at least in the archives at the link.

I have a tag for "DUCs" but I don't use the tag much any more, most recently November 24, 2018.

Anyway, back to Nick Cunningham and DUCs. Here's the link
The number of drilled but uncompleted wells (DUCs) in the U.S. shale patch has skyrocketed by roughly 60 percent over the past two years. That leaves a rather large backlog that could add a wave of new supply, even if the pace of drilling begins to slow.
The backlog of DUCs has continued to swell, essentially uninterrupted, for more than two years. The total number of DUCs hit 8,723 in November 2018, up 287 from a month earlier. That figure is also up sharply from the 5,271 from the same month in 2016, a 60 percent increase. The EIA will release new monthly DUC data on January 22, which will detail figures for December.
Some level of DUCs is normal, but the ballooning number of uncompleted wells has repeatedly fueled speculation that a sudden rush of new supply might come if companies shift those wells into production. The latest crash in oil prices once again raises this prospect.
The calculus on completing wells can cut two ways. On the one hand, lower oil prices – despite the recent rebound, prices are still down sharply from a few months ago – can cause some E&Ps to want to hold off on drilling new wells. That may lead them to decide to complete wells they already drilled as a way of keeping production aloft while husbanding scarce resources. Companies that are posting losses may be desperate for revenues, so they may accelerate the rate of completions from their DUC backlog.
North Dakota allows two years from spud to completion; it used to be a year. I don't know what the rules are in other states. But North Dakota will permit DUCs to exceed two years but require a waiver. Those are rare.
But completing DUCs is low-hanging fruit. The cost of drilling a well accounts for 30 to 40 percent of the total cost.
As a result, companies deciding on whether to bring a DUC online has already incurred the drilling costs. A shale company may decide to scale back on new drilling this year because of low prices, but the rush of fresh supply from DUCs may allow output to continue to grow. Of course, any decline in new drilling will eventually be felt in the production data, but that may not show up until somewhere down the line. More completions from the DUC backlog could keep near-term production figures on the rise.
How this shakes out is anybody’s guess, but at a minimum, the explosion in DUCs over the past two years complicates oil production forecasts for this year.
By the way, that data point that the cost of drilling a well accounts for 30 to 40 percent of the total cost is an interesting data point. I had thought the same thing. During the early days of the Bakken boom, drilling/completion were closer to 50/50 but drilling is now incredibly less expensive.

Nine Point Energy WIll Report A Nice Well This Week -- January 20, 2019

The well:
  • 34493, conf, Nine Point Energy, Hovde 150-100-6-7-2H, Spring Creek, a very nice well, fracked 6/10/2108 -7/12/2018, 6.7 million gallons of water, 87.2% water by mass:

    DateOil RunsMCF Sold
    11-20182266721969
    10-20182928529907
    9-20181769820246
    8-20182644022283
    7-201836223341
The graphics:



Other wells:
  • 34490, 1,652, Nine Point Energy, Hovde 150-100-6-7-13H, Rawson, 60 stages; 10 million lbs, mostly 100 mesh, t7/18; cum 108K 11/18;
  • 34491, 1,126, Nine Point Energy, Hovde 150-100-6-7-4H, Spring Creek, 60 stages; 12 million lbs, mostly 100 mesh, t7/18; cum 103K 11/18;
  • 34492, 1,287, Nine Point Energy, Hovde 150-100-6-7-3H, Spring Creek, 60 stages; 10 million lbs, mostly 100 mesh, t7/18; cum 106K 11/18;
  • 34493, see above.

  • 26725, 436, Nine Point Energy, Hovde 150-100-6-7-1H, Spring Creek, t4/14; cum 229K 11/18, recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN11-20182850375010217411242981394290
BAKKEN10-20183168086827365891264396902953
BAKKEN9-201825383238103265062155773442
BAKKEN8-201828328832734087132592409850
BAKKEN7-201820874929644519
BAKKEN6-20180000000
BAKKEN5-201826144514981308191719170
BAKKEN4-201830196219721829239923990
BAKKEN3-201831213622762123261826180
BAKKEN2-201822102197411142902900
BAKKEN1-201831204720462034277927790
BAKKEN12-20173120612071196634513282170
BAKKEN11-2017301845171517992996297026

******************************
Bookstore Outing With Papa

Hot chocolate and a chocolate chip cookie
Peppa
A set of "Bob" books

The Winter Storm Page, T+18 -- January 20, 2019

Foul bigley. Less than two minutes to play, the NFL officials miss a huge penalty. Huge penalty. NFL officials fail to call penalty on Rams. Had they called the penalty it would have guaranteed a home game win for the New Orleans Saints. Only way to read it: NFL officials did not want to be "blamed" for winning the game for the Saints. But the refs really, really blew it. Rams can now win or take it to overtime. Later: Saints lose in overtime. Saints fans have every reason to be very, very upset. It will be interesting to hear Rush Limbaugh's take on this.

Prediction: I'll go out on a limb here and predict that the New England Patriots will defeat the Kansas City Chiefs. Bigley. Later: wow, that was close.

Heat. Link here. New Englanders are paying $85/MWh to heat their homes right now during Winter Storm Harper using 6% coal to maintain the grid. After supplying a max of 1791MW earlier this morning, renewables are starting to peter out, currently at 1624 MW, or 12% of demand.

Montreal: winter festival canceled -- too cold. I can't make this stuff up.

Alexa: what time does the football game start today? The Rams take on the Saints at 2:05 p.m. Central Time.

Alexa: what's more important, the wall or the NFL playoffs? Alexa: "Do you want to hear a joke?"

*****************
The Art Page

From last night:



 

The Transportation Page -- T+18, January 20, 2019

Day 30 of the partial government shutdown.

North Dakota: only state in the union that has no Tesla chargers. The only state. Tesla promised "a" charging unit for North Dakota for 2014, 2015, 2016, 2017 .... but not to be. 

Cost to fully charge a Tesla: Via a google search:

Hold that thought: more to come.

110-car unit trains? So yesterday. Now the trains are up to three miles long.
The freight train is now on track to stretch up to 3 miles long, with 200 cars or more. 
Railroads are taking advantage of the nearly $100 billion spent on rail infrastructure and equipment over the past several years. The spending included high-horsepower locomotives and upgraded track strong enough to withstand the extreme forces that can pull a long, heavy train off of the track on tight curves.
Some railroads are adding remotely controlled diesel locomotives at the end or in the middle of superlong trains so that locomotives are both pulling and shoving at the same time. Distributing the locomotive power reduces the heavy loads on the couplers that can break a train in two, improves train handling by reducing slack action and makes brake applications quicker and smoother.
Custom Critical. I assume FedEx has had this for years. I was unaware until I saw a FedEx Custom Critical truck parked in Barnes and Noble parking lot, Southlake, TX, this morning. It has a huge tractor suggesting that two or three people "lodge" in this vehicle while driving point-to-point, long haul. See this link. Where did Custom Critical come from?


Back to Tesla: cutting costs. By raising prices. From the linked article:
Tesla's efforts to improve its bottom line go beyond layoffs and disappearing perks. Electrek has learned that Tesla is raising Supercharger rates around the world, with per kWh rates climbing about 33 percent in numerous markets. While it's still less expensive than gas (even the 36 cents per kWh in some California locations is modest), it's not quite the savings it represented in the past. According to Tesla, this is really a matter of adapting to financial realities.
So, at 13 cents/kWh, the full charge would cost $13. At 36 cents/kWh I would assume the cost is $36. That full charge, $36 would give one a range of 295 miles. On fumes, pulling into a service station to fill my 2012 Honda Civic costs me just under $20. Interstate driving in Kansas on a full tank with the wind at my back, my range is around 525 miles.

At four hundred miles, I stop and fill up with gasoline, taking about 6.5 minutes (after getting snacks inside) instead of waiting 30 - 45 minutes to re-charge -- assuming a charging station is even available.

I don't know. You do the math.

"Even the 36 cents per kWh in some California locations is modest." For elites, perhaps.

A Nice Enerplus Well That Will Be Coming Off The Confidential List This Week -- January 20, 2019

The well:
Early production data:
DateOil RunsMCF Sold
11-20182275021668
10-20182995422595
9-2018289464965
8-2018503561622
7-2018138551622

Older wells in the area include the following. These wells are tracked elsewhere and the data won't be updated here:
  • 18752, 2,194, Enerplus, Henry Bad Gun 17A-20-1H, t7/10; cum 475K 11/18; steady Eddy, no jump in production;
  • 18753, 1,594, Enerplus, Henry Bad Gun 8D-5-1H, t7/10; cum 571K 11/18; steady Eddy, but also a huge jump in production in 12/12;

  • 20931, PNC, Enerplus, Copper,
  • 20932, PNC, Enerplus, Rocket,


  • 18627, 746, Enerplus, Henry Bad Gun 9C-4-1H, t4/12; cum 267K 11/18; steady Eddy, but also some subtle jumps in production over the years;
  • 18790, 1,773, Enerplus, Henry Bad Gun 16B-21-1H, t10/10; cum 463K 11/18; steady Eddy, but also a huge jump in production in 12/12;

  • 20606, PNC, Enerplus, Saturn,
  • 20608, PNC, Enerplus, Venus,

  • 20405, PA/830, MRO, Boy Chief USA 11-15H, Moccasin Creek, t12/11; cum 52K 8/15;
  • 20974, 730, MRO, Boy Chief USA 11-15H, Moccasin Creek, t1/12; cum 5216K 11/18;

  • 23085, 2,506, Rimrock, Moccasin Creek 16-10-3-3H3, Moccasin Creek, t12/12; cum 326K 11/18;

The Enerplus Heavy Metal Pad

The graphic:


Enerplus' "heavy metal" pad:
  • 33967, 3,162, Enerplus, Cobalt 147-93-09D-04H, Moccasin Creek, t7/18; cum 202K 3/19;

    DateOil RunsMCF Sold
    10-20182533019107
    9-2018284944887
    8-2018508112650
    7-2018226302650

  • 33968, 932, Enerplus, Nickel 147-93-16B-21H-TF, Moccasin Creek, 33 stages; 5.9 million lbs, t8/18; cum 110K 3/19;

    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN10-2018301755417484198171228767964413
    BAKKEN9-2018221999220032207661399492474094
    BAKKEN8-201831282922795838928198055819746
    BAKKEN7-20181236226349316558106
    BAKKEN6-20181600000

  • 33969, 1,077, Enerplus, Steel 147-93-09D-04H-TF, Moccasin Creek, t8/18; cum 138K 3/19;

    DateOil RunsMCF Sold
    10-20181727613032
    9-2018264424535
    8-201835723108
    7-2018923108

  • 33970, 2,038, Enerplus, Tungsten 147-93-16A-21H, Moccasin Creek, t7/18; cum 163K 3/19;

    DateOil RunsMCF Sold
    10-2018207598070
    9-20182618912090
    8-2018476934504
    7-2018175344504

  • 33971, 2,631, Enerplus, Zinc 147-93-09D-04H, Moccasin Creek, t7/18; cum 190K 3/19;

    DateOil RunsMCF Sold
    10-20182995422595
    9-2018289464965
    8-2018503561622
    7-2018138551622

  • 33972, 1,126, Enerplus, Lead 147-93-16B-21H-TF, Moccasin Creek, t7/18; cum 149K 3/19;

  • DateOil RunsMCF Sold
    10-2018181457053
    9-20182666812311
    8-2018346311747
    7-201868021747


  • 33973, loc, Enerplus, Titanium 147-93-16A-21H,
  • 33974, loc, Enerplus, Silver 147-93-09D-04H,
  • 33975, loc, Enerplus, Platinum 147-93-16A-21H,

Wells Coming Off The Confidential List This Next Week -- January 20, 2019

Monday, January 28, 2019
35031, conf, XTO, FBIR Youngbear 31X-9BXC, Heart Butte, no production data,
34000, conf, Hess, SC-1WX-152-99-0809H-2, Banks, no production data,

Sunday, January 27, 2019
35032, conf, XTO, FBIR Youngbear 31X-9G, Heart Butte, no production data, 
34198, conf, CLR, Norway 8-5H, Fancy Buttes, producing, 
34007, conf, CLR, Radermecher 7-2H2, Camel Butte, a nice well,
33661, conf, Oasis, Berquist 5298 11-27 2B, Banks, a nice well, 
32533, conf, Petro-Hunt, USA 153-95-4B-9-4H, Charlson, no production data,

Saturday, January 26, 2019
35033, conf, XTO, RBIR Youngbear 31X-9C, Heart Butte, no production data, 
34008, conf, CLR, Radermecher 8-22H, Camel Butte, producing,

Friday, January 25, 2019
35034, conf, XTO, FBIR Youngbear 31X-9H, Heart Butte, no production data,
30052, conf, WPX, Good Voice 34-27HF, Spotted Horn, no production data,

Thursday, January 24, 2019
35035, conf, XTO, FBIR Youngbear 31X-9D, Heart Butte, no production data, 
33972, conf, Petro-Hunt, USA 153-95-8A-31-4H, Moccasin Creek, a very nice well,
30051, conf, WPX, Good Voice 34-27HU, Spotted Horn, no production data, 

Wednesday, January 23, 2019
34197, conf, CLR, Norway 9-5H2, Fancy Buttes, producing, but not much,
33643, conf, CLR, Ransom 5-20H2, Elidah, producing, but not much,

Tuesday, January 22, 2019
34879, conf, Newfield, Berg Federal 149-97-30-31-4H, Haystack Butte, producing, 
34878, conf, Newfield, Berg Federal 149-97-30-31-5H, Haystack Butte, producing, 
34613, conf, WPX, Benson 3HC, Squaw Creek, no production data, 
34476, conf, Lime Rock Resources, Laura Sadowsky 2-1-36H-142-96, Manning, an okay well, 
34475, conf, Lime Rock Resources, Laura Sadowsky 3-1-36H-142-96, Manning, an okay well,
34197, conf, CLR, Norway 9-5H2, Fancy Buttes, producing, but not much,
33643, conf, CLR, Ransom 5-30H2, Elidah, producing, albeit not much,
23939, conf, XTO, FBIR Ironwoman 21X-10E, Heart Butte, 

Monday, January 21, 2019
34885, conf, XTO, FBIR Ironwoman 21X-10B, Heart Butte;
34876, conf, Newfield, Berg Federal 149-97-30-31-7H,  Haystack Butte, producing,
33779, conf, Oasis, Crane Federal 5300 14-27 3B, Willow Creek, a very nice well,

Sunday, January 20, 2019
32926, conf, BR, Chuckwagon 31-15TFH, Sand Creek, no production data,
23940, conf, XTO, FBIR Ironwoman 21X-10F, Heart Butte -- look how old this permit is;

Saturday, January 19, 2019
34493, conf, Nine Point Energy, Hovde 150-100-6-7-2H, Spring Creek, a very nice well,
33971, conf, Enerplus, Zinc 147-93-09D-04H, Moccasin Creek, a huge well, the Enerplus heavy metal pad is tracked here;
23937, conf, XTO, FBIR Yellowwolf 21X-10F, Heart Butte -- look how old this permit is;

Time To Get Up -- January 20, 2019

Updates

Later, 8:39 a.m. CT: now that I've had an hour to reflect on the news coming out of the midwest to New England regarding Winter Storm Harper, the storms in eastern and northeastern New Mexico -- Taos south to Albuquerque  -- were much, much worse than what I've seen so far this morning. The big difference, of course, the number of folks affected, and the ice on trees that will cause huge power outages. But the early morning focus seemed to be on all the good skiing the Kennedy family will have in Vermont.[Later: interestingly, there were no major outages reported as far as I know; except that it was a "bit" cold, Winter Storm Harper seems to have been a bit hyped -- almost as if the weathermen/women are so brainwashed with AGW, they have forgotten what winters are really like. In retrospect, Winter Storm Harper seems to have been fairly typical for a winter storm. The fact that the lead meteorologist was so focused on "postcard Vermont" and beautiful skiing suggests that observation is not far off the mark, if off the mark at all. Posted January 24, 2019.]

Original Post
Australia, link here, air conditioning costs, heat wave:
  • NSW: $70;MWh
  • VIC: $134/MWh
  • SA: $134/MWh
ISO New England, link here, heaing, winter storm Harper:
  • coal: 6% 
  • spiked to $175/MWh but now back to $50/MWh
Weather Channel
  • excited about the skiing in Vermont; that seems to be the lead story on the Weather Channel today -- reporting centered in Vermont
  • municipalities appear to be "keeping up"
  • ice on trees big concern: power outages
  • overall: a big storm but hey! it's winter
  • but overall, pretty much a non-story until we start getting reports of power outages
  • time for soup? nope, time for coffee ...
Time for coffee, from theglobaleconomy -- after the BBC reported that global warming will lead to shortage of coffee --

Whack-a-mole; it seems that it has come down to this -- everyday we get a new scare what global warming will do to us, and then someone actually checks the data.

By the way, speaking of "mole" -- and yet another definition of mole of which I was unaware. While reading The Campaigns of Alexander: The Landmark Arrian, edited by James Romm, c. 2010, I ran across a line in which the author said Alexander built a mole from the coast to the city. I had no idea what Arrian was talking about. A mole? Built a mole from the coast to an inland city? A mole: