Friday, January 24, 2020

"Rule Of Capture" -- Pennsylvania -- January 24, 2020

Anyone following this story knows that Texas and North Dakota have it right.

We've talked about this issue before. 

"Rule of capture" case in Pennsylvania.

From an August 2, 2011, posting:
The writer of the link from August 2, 2010, has raised a very interesting issue. This brings a whole new question regarding "how do I know a neighbor's well isn't taking oil from my site?"
The Texas Railroad Commission recently upheld / clarified a ruling that says a neighbor cannot sue for oil production / loss from a horizontal that comes right up to the section line.
The commission said that if the neighbor is worried about a neighbor's well taking oil from his/her site, he/she better drill his/her own well. One can argue that the effectiveness of fracking extends only about 500 feet (radius) from the bore hole, and that may be true of the enhanced recovery, but that question will probably be raised.
As noted earlier, the Texas Railroad Commission is similar to the NDIC in North Dakota, and most states follow the rules set by Texas regarding oil / mineral rights. 
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Clean Water Act

Meanwhile, Trump administration redefines jurisdiction of Clean Water Act.  This is another great case in which the former administration clearly overstepped any reasonable boundaries of common sense:
The new rule will apply federal regulation to territorial seas and traditional navigable waters, continuous (perennial) and intermittent tributaries of those waters, adjacent wetlands, lakes or water impoundments connected by surface flows to jurisdictional waters, and ditches that have been dug in wetlands or waterways.
The new rule will not apply federal controls to isolated lakes, ponds and wetlands lacking surface water connections to navigable waters, nor will they be applied to ditches outside wetlands or waterways. Federal regulations also will not apply to “ephemeral” streams, which flow only in the immediate aftermath of rain. Those will be left to states and local governments.
Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, issued a statement welcoming the new rule.
Under the former administration, based on my reading of the above, "the Obama interpretation" included trickles of water in my backyard after a heavy rain. 

Notes From All Over, Part 1 -- January 24, 2020

Wow, I'm in a great mood. Watching a sports documentary on all the snow at Jackson Hole for skiing this year. The skiers say they have never seen so much great powder.

Market: speaking of powder, for those who have keeping their powder dry for a market pullback should have had a great day today. I'm always fully invested but I did find some cash to buy some shares at a very nice price. Good luck to all.

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Golf: Tiger Woods playing? I don't know. Let's see. Yes, there he is, tied for 18th.

Dividends: there are pros and cons with all investments. But, I suppose, one can argue, with regard to investments, there are worse things than dividends. But for those who enjoy dividends, two sites that are particularly helpful:
USPS prices increasing Sunday.
The price of a first-class stamp isn’t changing, but the prices for flat-rate Priority Mail packages are going up across the board. Those prices will rise by about 1.9 percent overall. The average Priority Mail Express price will increase 3.5 percent, and Priority Mail will increase by 4.1 percent.
Some examples:
  • Small flat-rate box: Up from $7.90 to $8.30.
  • Medium flat-rate box: Up from $14.35 to $15.05.
  • Large flat-rate box: Up from $19.95 to $21.10.
  • APO/FPO large flat-rate box: Up from $18.45 to $19.60.
  • Regular flat-rate envelope: Up from $7.35 to $7.75.
  • Legal flat-rate envelope: Up from $7.65 to $8.05.
  • Padded flat-rate envelope: Up from $8 to $8.40.

WTI Barely Holding At $54 -- January 24, 2020

The wells:

$54.191/24/202001/24/201901/24/201801/24/201701/24/2016
Active Rigs5664563847

No new permits today.

No permits renewed.

No permits canceled.

No producing wells (DUCs) reported as completed.

I guess a no runs, no hits, no errors kind of report. 

So, How Did This Happen? Closer Look At A New Case For Nine Wells In One Drilling Unit In The February, 2020, Hearing Dockets: New Operator In The Bakken -- January 24, 2020

Maroon Bells Partners: expanding the Bakken Core website From the website:
Our company was formed in 2018, but has been focused on the Bakken since the beginning of the boom in 2011. Our firsthand knowledge of the rock, the people, and the infrastructure that make up this play combined with our passion for the Bakken and over 25 years of engineering experience have produced a team strongly suited and ready to develop a Bakken asset. 
The team
  • J.D. Diamantopoulos: co-founder; 12-year career as a reservoir engineer with ExxonMobil/XTO; seven years specifically dedicated to the Bakken play;
  • Billy Beery, co-founder; 14 years in various petroleum engineering disciplines; XTO's senior drilling engineer, personally overseeing XTO's growth in activity from 2 to 16 rigs during the Bakken boom;
Maroon Bells? see this site and this wiki site.

Maroon Bells not yet listed as an operator over at the "well search" site at the NDIC.

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The Case
The February, 2020, hearing dockets posted here.

The case:
  • 28256, Maroon Bells Partners, Ross-Bakken, a 1920-acre unit; nine wells; sections 32/33/34-156-90; Mountrail County;
The graphics:



Closer Look At A Hess Case For 12 Wells In One Drilling Unit In The February, 2020, Hearing Dockets

The February, 2020, hearing dockets posted here

The case:
  • 28268, Hess, Blue Buttes-Bakken; twelve wells on a 1280-acre unit; sections 3/4-150-95; McKenzie County; there are already eleven producing wells on a 1280-acre unit, sections 3/4-150-95;
The wells:
  • 23457, 1,196, Hess, BB-Budahn A-150-95-0403H-2, Blue Buttes, t6/13; cum 309K 11/19;
  • 23455, 1,291, Hess, BB-Budahn A-150-95-0403H-3, Blue Buttes, t6/13; cum 348K 11/19;
  • 24409, 1,339, Hess, BB-Budahn A150-95-0403H-4, Blue Buttes, t6/13; cum 359K 11/19;
  • 24410, 56 (no typo), Hess, BB-Budahn A 150-95-0403H-5, Blue Buttes, t6/13; cum 204K 11/19;

  • 19737, 1,341, Hess, BB-Budahn A-150-95-0403H-1, Blue Buttes, t1/12; cum 469K 11/19;

  • 27505, 1,628, Hess, BB-Budahn A-150-95-0403H-6, Blue Buttes, t6/13; cum 362K 11/19;
  • 27504, 1,314, Hess, BB-Budahn A-150-95-0403H-7, Blue Buttes, t12/14; cum 247K 11/19;
  • 27503, 1,675, Hess, BB-Budahn A-150-95-0403H-8, Blue Buttes, t12/14; cum 302K 11/19;
  • 27502, 1,740, Hess, BB-Budahn A-150-95-0403H-9, Blue Buttes, t12/14; cum 278K 11/19;
  • 27501, 1,674, Hess, BB-Budahn A-150-95-0403H-10, Blue Buttes, t12/14; cum 316K 11/19;
  • 28161, 1,196, Hess, BB-Budahn A-LS-150-95-0403H-1, Blue Buttes, t12/14; cum 374K 11/19;
The graphic:

Closer Look At A CLR Case For 24 Wells In One Drilling Unit In The February, 2020, Hearing Dockets

From the February, 2020, NDIC hearing dockets:
  • Case 28315, CLR, Cedar Coulee-Bakken, 2560-acre unit; section 32-148-96 and sections 5/8/17-147-96, 24 wells; Dunn County;
The existing wells/permits in these sections:
  • 16682, 113, CLR, Flint Chips 34-5H, Cedar Coulee, 1280-acre, t10/08; cum 92K 11/19;

  • 16605, IA/418, CLR, Dennis 44-8H, Cedar Coulee, 1280-acre, t7/07; cum 86K 9/19; remains off line 11/19;

  • 23003, conf, CLR, Dennis 2-8H, Cedar Coulee, most likely 1280-acre,
  • 23004, conf, CLR, Dennis 3-8H, Cedar Coulee, most likely 1280-acre,
  • 23002, conf, CLR, Flint Chips 3-5H, Cedar Coulee, most likely 1280-acre,
  • 23001, conf, CLR, Flint Chips 2-5H, Cedar Coulee, most likely 1280-acre,
Cedar Coulee is tracked here. At that link it is noteworthy that the area under discussion above is in the immediate area of that shown in the graphic at the Cedar Coulee link. For someone who doesn't know much about the Bakken, LOL, it's amazing how much gets posted on the blog.

Graphics:





February, 2020, Hearing Dockets Are Posted

The NDIC hearing dockets are tracked here.

Link here.

The usual disclaimer applies. As usual this is done very quickly and using shorthand for my benefit. There will be factual and typographical errors on this page. Do not quote me on any of this. It's for my personal use to help me better understand the Bakken. Do not read it. If you do happen to read it, do not make any investment, financial, job, relationship, or travel plans based on anything you read here or think you may have read here. If this stuff is important to you, and I doubt that it is, but if it is, go to the source.

Wednesday, February 19, 2020
Six Pages
Case #28251 - #28275, inclusive

The cases:
  • 28251, Hess, Wheelock-Bakken, 1280-acre unit; six wells; Williams County; sections 13/24-156-98;
  • 28252, Hess, Blue Buttes-Bakken, 2560-acre unit; one well; McKenzie County; sections 33/34-151-95; section 3/4-150-95;
  • 28253, Hess, Manitou-Bakken, alter definition of the stratigraphic limits of the pool, Mountrail County;
  • 28254, Marathon; setback; McKenzie;
  • 28255, MRO, exception to the rule; Mountrail, McKenzie counties;
  • 28256, Maroon Bells Partners, Ross-Bakken, a 1920-acre unit; nine wells; sections 32/33/34-156-90; Mountrail County;
  • 28257, Lime Rock Resources, Cabernet-Bakken and/or Murphy Creek-Bakken; 2560-acre unit; two wells; Dunn County;
  • 28258, Lime Rock Resources, Murphy Creek-Bakken and/or Manning-Bakken; overlapping 2560-acre unit; two wells; Dunn County;
  • 28259, Lime Rock Resources; Murphy Creek-Bakken; an overlapping 2560-acre unit; two wells; Dunn County;
  • 28260, Lime Rock Resources, Fayette-Bakken, Crooked Creek-Bakken and/or Willmen-Bakken; an overlapping 2560-acre unit; two wells; Dunn County;
  • 28261, Lime Rock Resources, Manning-Bakken and/or Fayette-Bakken, an overlapping 2560-acre unit; two wells; Dunn County;
  • 28262, Lime Rock Resources, Willmen-Bakken, an overlapping 2560-acre unit; two wells; Dunn County;
  • 28263, Hess, pooling;
  • 28264, Hess, pooling;
  • 28265, Hess, pooling;
  • 28266, Hess, pooling;
  • 28267, Hess, pooling;
  • 28268, Hess, Blue Buttes-Bakken; twelve wells on a 1280-acre unit; sections 3/4-150-95; see this post; McKenzie County;
  • 28269, MRO, pooling;
  • 28270, MRO, pooling;
  • 28271, MRO, pooling;
  • 28272, MRO, pooling;
  • 28273, MRO, pooling;
  • 28274, MRO, pooling,
  • 28275, Hess, SWD, BL-Pleasant Valley, Beaver Lodge, Williams County
Thursday, February 20, 2020
Twelve Pages
Case #28276 - #28333, inclusive

The cases:
  • 28276, Enerplus, McGregory Buttes-Bakken; two overlapping 2560-acre units; one well; Dunn County
  • 28277, Enerplus, Spotted Horn-Bakken; an overlapping 2560-acre unit; one well; McKenzie;
  • 28278, EOG, Spotted Horn-Bakken; establish four overlapping 2560-acre units; one well; McKenzie County; sections 7/8/17/18-; sections 8/9/16/17-; sections 19/20/29/30-; and sections 17/18/19/20-150-94.
  • 28279, EOG, Clarks Creek-Bakken, establish an overlapping 2560-acre unit; one well; McKenzie;
  • 28280, EOG, Antelope-Sanish, an overlapping 2560-acre unit; one well; McKenzie County;
  • 28281, Kraken, Sanish-Bakken, i) an overlapping 1280-acre unit; ii) two overlapping 2560-acre units; one well; iii) an overlapping 3840-acre unit; one well; Mountrail County;
  • 28282, SHD Oil & Gas, Van Hook-Bakken; i) a 1600-acre unit; nine wells; ii) a 1920-acre unit; one well; McLean, Dunn counties;
  • 28283, Nine Point Energy, Briar Creek-Bakken; 1920-acre unit; sections 5/8/17-152-104, eight wells; Williams, McKenzie counties
  • 28284, Rimrock Oil & Gas, Bailey-Bakken, two 1920-acre units; sections 27/28/29 and sections 32/33/34-147-93; ten wells on each; Dunn County
  • 28285, Eagle Operating, spacing for new well, Wobbly 19-9, file #37042; Bottineau County;
  • 28286, CLR, Baker-Bakken, i) two overlapping 1920-acre units; three wells each; ii) four overlapping 3840-acre units; one well; Williams, McKenzie counties;
  • 28287, CLR, Beaver Lodge-Bakken;  two overlapping 2560-acre units; one well; Williams County;
  • 28288, CLR, East Fork-Bakken, an overlapping 2560-acre unit; two wells; Williams County;
  • 28289, CLR, East Fork-Bakken, i) setback; ii) setback; Williams County;
  • 28290, CLR, Cedar Coulee and/or Oakdale-Bakken; i) setback; ii) setback; Dunn County;
  • 28291, CLR, Big Gulch and/or Cedar Coulee-Bakken; two overlapping 5120-acre units; four wells; Dunn County;
  • 28292, CLR, Jim Creek-Bakken, an overlapping 2560-acre unit; two wells; Dunn County;
  • 28293, CLR, Elm Tree-Bakken and/or Antelope-Sanish; i) an overlapping 1280-acre unit, sections 28/33-153-93; two wells; ii) an overlapping 2560-acre unit; sections 28/33-153-93 and sections 1/12-152-94, 22 wells on said overlapping 2560-acre unit; Mountrail and McKenzie counties; see this post;
  • 28294, CLR, legalese, suspend and revoke an XTO permit; notice to dismiss received;
  • 28295, Whiting, legalese, suspend and revoke a Kraken permit; 
  • 28296, Whiting, legalese, suspend and revoke a Kraken permit;
  • 28297, Whiting, legalese, suspend and revoke a Kraken permit;
  • 28298, Whiting, legalese, suspend and revoke a Kraken permit;
  • 28299, Whiting, legalese, suspend and revoke a Kraken permit;
  • 28300, Whiting, legalese, suspend and revoke a Kraken permit;
  • 28301, CLR, pooling,
  • 28302, CLR, pooling,
  • 28303, CLR, pooling,
  • 28304 CLR, pooling,
  • 28305, CLR, pooling,
  • 28306, CLR, pooling,
  • 28307, CLR, pooling,
  • 28308, CLR, pooling,
  • 28309, CLR, pooling, 
  • 28310, CLR, pooling, 
  • 28311, CLR, pooling, 
  • 28312, CLR, pooling, 
  • 28313, CLR, pooling, 
  • 28314, CLR, pooling, 
  • 28315, CLR, Cedar Coulee-Bakken, 2560-acre unit; section 32-148-96 and sections 5/8/17-147-96, 24 wells; Dunn County; see this post;
  • 28316, CLR, commingling,
  • 28317, CLR, commingling,
  • 28318, Slawson, pooling, 
  • 28319, Slawson, pooling, 
  • 28320, Slawson, pooling, 
  • 28321, Slawson, commingling,
  • 28322, Equinor, pooling,  
  • 28323, Petro Harvester Operating, pooling;
  • 28324, Petro Harvester Operating, pooling;
  • 28325, Petro Harvester Operating, pooling;
  • 28326, Petro Harvester Operating, pooling;
  • 28327, EOG, pooling,  
  • 28328, EOG, pooling,  
  • 28328, EOG, pooling,  
  • 28329, Kraken, Sanish-Bakken a 1280-acre unit; sections 4/5-153-92; nine wells; Mountrail County;
  • 28330, KODA Resources Operating, SWD;
  • 28331, Zavanna, SWD;
  • 28332, Ballard Petroleum, SWD;
  • 28333, Ballard Petrolem,  SWD;

Notes From All Over, Part 1 -- January 24, 2020

Holy mackerel: Brexit -- final documents signed today. One week from today, Brexit is official. US and EU will be stumbling all over each other to be the first to make deals. Coming off Davos, quite amazing. I assume those were the real discussions at Davos this year -- the deals that need to be made.

Oil: It's quite amazing to see how fast oil is falling. WTI is down another 2% this morning, off another $1.05; now trading below $55.

XOM: to sell its UK, Germany oil and gas operations.

Peak oil? What peak oil? Brazil breaks annual production record -- produced more than one billion bbls last year; daily average: 3.1 million bbls, up almost 8% year-on-year. 

Politics: apparently today, the third day of three days of opening statements, the US House impeachment managers will argue President Trump sought to stop impeachment efforts in the US House. Say what?

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The Paleontology Page

The Neogene period,  from 20 mya to 3 mya (numbers rounded). From wiki:
During this period, mammals and birds continued to evolve into modern forms, while other groups of life remained relatively unchanged.
Early hominids, the ancestors of humans, appeared in Africa near the end of the period.
Some continental movement took place, the most significant event being the connection of North and South America at the Isthmus of Panama, late in the Pliocene.
This cut off the warm ocean currents from the Pacific to the Atlantic Ocean, leaving only the Gulf Stream to transfer heat to the Arctic Ocean. The global climate cooled considerably over the course of the Neogene, culminating in a series of continental glaciations in the Quaternary Period that follows.
*********************************
Flashback

From July 23, 2016:

US Crude Oil Production Efficiency Continues Year-Over-Year Improvements -- EIA -- January 24, 2020


Link here.
U.S. oil production from tight formations increased in 2019, accounting for 64% of total U.S. crude oil production.
This share grew because of the increasing productivity of new wells that were brought online during 2019. Since 2007, the average first full month of oil production from new wells in regions tracked by the U.S. Energy Information Administration’s (EIA) Drilling Productivity Report (DPR) has increased. The growing initial production rates have helped oil production from tight formations to increase despite the slowdowns in drilling activity when oil prices fell between 2015 and 2016. Since 2017, recovering oil prices and more efficient production from new wells have helped producers cover costs of drilling, production, and the development of new technologies.
The average new well in each DPR region produced more oil in 2019 than wells drilled in previous years in those same regions. This trend has persisted for more than 10 consecutive years. More effective drilling techniques, including the increasing prevalence of hydraulic fracturing and horizontal drilling, have helped to increase these initial production rates. In particular, well productivity was improved because of the injection of more proppant during the hydraulic fracturing process and the ability to drill longer horizontal components (also known as laterals) and perforate more stages. 
Increasing well productivity has supported crude oil production even in years such as 2015, when oil prices fell and rig counts dropped. In 2016, rig counts continued to decline sharply, and total U.S. crude oil production decreased for the first time in 10 years. Fewer wells were drilled; however, those that were drilled were drilled more quickly and located in more productive areas, which led to increasing per-well production.

Two Wells Coming Off The Confidential List Today -- January 24, 2020

Active rigs:

$55.361/24/202001/24/201901/24/201801/24/201701/24/2016
Active Rigs5464563847

Two wells coming off the confidential list today  --  Friday, January 24, 2020: 85 for the month; 85 for the quarter, 85 for the year:
  • 36260, conf, WPX, Mandaree Warrior 14-11HX,
  • 35774, conf, CLR, Boulder 10-4H,
RBN Energy: Outrigger Energy's D-J Basin crude gathering systems.
Transporting crude oil from the lease to refineries and export docks is like a long-distance relay race. The crude oil gathered from several wells is handed off to shuttle or takeaway pipelines, which then pass it on to regional crude hubs like Cushing, OK — from the hubs, crude is transferred to still other pipes. To get the relay going, the developers of crude gathering systems work closely with their takeaway pipeline counterparts to figure out the most efficient way to effect the first baton pass. Today, we continue our series on crude-related infrastructure in the Rockies’ Denver-Julesburg (D-J) Basin with a look at Outrigger Energy’s existing and planned gathering systems, and their connections to Tallgrass Energy’s still-expanding Pony Express takeaway pipeline.