Natural Gas Production in the Barnett -- Staggering

This study was reported earlier at the Oil & Gas Journal. Now Rigzone is commenting on the same story. This linked article below has nice graphics, and longer discussion.

Rigzone is reporting:

The Barnett Shale in North Central Texas is an important field for the state and the nation's second largest shale gas field. The history of the field's production and the financial performance of operators in the field have played a significant role in fueling the debate over the viability of the shale revolution. For the past 4-5 years there has been a vigorous debate underway about the volume of shale gas resources in the U.S. and elsewhere, and the amount of production that can be extracted from these formations economically. This latter consideration played a part in the debate over the financial performance of operators who have staked their future on the shale revolution. So will this exhaustive study of the Barnett Shale end the debate, or merely provide fuel to continue it?

The study concludes that there is 86 trillion cubic feet (Tcf) of technically recoverable free gas in the 8,000 square miles of the field analyzed. As of 2010, the field had produced over 12 Tcf of gas and there was 7 Tcf of gas reserves proven. Of the remaining 67 Tcf of gas remaining, 45 Tcf is located in drilled blocks consisting of 4,172 square miles of the field and 22 Tcf in undrilled blocks. The 45 Tcf in drilled blocks exceeds the estimates of 23.81 Tcf by the Energy Information Administration (EIA) of 4,000 miles of active area prepared in July 2011. The 67 Tcf of technically recoverable gas over 8,000 square miles exceeds the EIA estimate for the full Barnett field of 43.37 Tcf, which covered 6,500 square miles. The U.S. Geological Survey estimated 26 Tcf of reserves for the Barnett field in their 2003 assessment that covered 5,000 square miles.

Go to the linked article to see how Rigzone approaches this study.

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For absolutely no reason except the music:

I Still Miss Someone, Johnny Cash

I Still Miss Someone, Emmylou Harris

Random Observation of Production of a Single Bakken Well

So, what do you notice about the data below?

18110, 1,018, EOG, Fertile 11-10H, Parshall, t6/10; cum 155K 1/13; I've only shown the data back to October, 2011:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2013	31	7697	7697	1921	2583	2412	17
BAKKEN	12-2012	31	9953	9930	2016	3698	3037	506
BAKKEN	11-2012	10	1497	1500	1977	667	474	154
BAKKEN	10-2012	31	2213	2266	706	1218	1025	38
BAKKEN	9-2012	28	1952	1916	617	915	721	66
BAKKEN	8-2012	29	1756	1782	721	735	474	120
BAKKEN	7-2012	31	1880	1824	708	1068	849	64
BAKKEN	6-2012	30	2069	2069	704	1050	900	0
BAKKEN	5-2012	31	2156	2186	685	888	736	0
BAKKEN	4-2012	30	2234	2207	574	1015	866	0
BAKKEN	3-2012	31	2390	2430	650	1091	942	0
BAKKEN	2-2012	29	2450	2527	649	1139	994	0
BAKKEN	1-2012	28	2465	2378	813	1047	881	29
BAKKEN	12-2011	31	2634	2600	715	1150	1001	0
BAKKEN	11-2011	30	2788	3050	740	1334	1184	0
BAKKEN	10-2011	31	3049	2881	816	1412	1230

Yes, I noticed the same thing: production from this well was in the "2,200 bbls per month" range when it was taken off-line for 20 days in November, 2012. When it came back on line, production the very first month jumped to almost 10,000 bbls/month.

This had nothing to do with a pump; the pump was put on back in August, 2010.

Based on the flaring, it appears that takeaway capacity for natural gas is also constrained.

I don't have any explanation for the sudden jump in production, but I'm sure it's not unique. Just one more peculiarity in the Bakken.

Only One Well Coming Off The Confidential List Wednesday

22703, 1,185, EOG, Wayzetta 22-1509H, Parshall, t1/13; cum --

So, how are the four short lateral horizontal wells in the four sections that are north, south, east and west of this EOG Wayzetta well doing?

• 17030, (north), 1,967, EOG, Skaar 7-10H, Parshall, t6/08; cum 578K 1/13; taken off-line the last two months;
• 16784 (west), 1,565, EOG, Wayzetta 3-15H, Parshall, t5/08; cum 416K 1/13;
• 16671 (south), 1,198, EOG, Cormylo 1-23H, Parshall, t10/07; cum 387K 1/13;
• 16973 (east), 1,252, EOG, Wayzetta 2-14H, Parshall, t6/08; cum 288K 1/13;

Remember, these are all short lateral wells.

More Global Warming Hits North Dakota: Major Storm Resets Winter for the Dakotas

The Minot Daily News is reporting:

Saturday was a beautiful day over much of North Dakota. Sunday brought with it a warning that Saturday's sneak peek at spring was about to become a poke in the eye.

By early Monday morning, "no travel" advisories had been issued for much of the western and central portions of the state. Snow was piling up rapidly on roadways, sidewalks and patios that had been free of the white stuff a few hours earlier.

Minot Public Schools called off classes for the day shortly after 5:30 a.m. Monday. The Minot Air Force Base told non-essential personnel to stay home. Sheriff's departments in Williams, Divide, McKenzie and Renville counties were among the growing list advising no travel. Most motorists couldn't get out of their driveways anyway. Those who did quickly discovered why travel was difficult.

And so it goes. 

Two Business Days After the Sequester Kicks In: Dow Smashes Through Record; Sees Highest Close Since Halloween, 2007 -- Qualitative Easing vs Quantitative Easing: Let's Call The Whole Thing Off

Updates

Later, 8:36 pm: so much for all those scares that the sequester would destroy the economy. The Washington Examiner is reporting:

White House Press Secretary Jay Carney declined to weigh in on the Dow hitting an all-time high on Tuesday, a development clashing with President Obama’s assertion that across-the-board spending cuts would imperil the economy

“I don’t comment on markets,” Carney insisted on Tuesday.

Just two months ago, however, Carney cited the stock market as proof that Republicans were harming the economy. [Правда.]

“I would remind you of the damage caused to our economy by the approach that House Republicans took on this matter just in the summer of 2011,” Carney said in January when asked about fiscal negotiations between Obama and House Speaker John Boehner. 

“As a result of their flirtation with default, the stock market plummeted. The Dow fell 7 percent, or almost 900 points, in late July and early August of 2011. The United States was downgraded and the Dow fell another 10 percent ...."

Carney: "I don't comment on markets." [Except when it's useful to do so.] I can't make this stuff up....

Later, 7:01 pm: this is why I don't post some "anonymous" comments. I don't want to embarrass "anonymous." Smile.

I corrected my "quantitative easing" to "qualitative easing" in the original post, but it appears it is not as simple as that.

From the "Economist's View": Qualitative Easing: How it Works and Why it Matters. And then from Mahifx: Quantitative vs. Qualitative Easing: How Two Little Letters Make All the Difference.

And from the Ludwig von Mises Institute: Qualitative Easing.

But this one might be the best: Is the Fed Engaged in Quantitative or Qualitative Easing? And the author says: "As I define it, qualitative easing." Wow.

I'm not going to parse the distinctions, but it's never as simple as some folks would like to make it. So, let's end with this, from wiki:

Because of the song, tomayto, tomahto has come to be used as an expression meaning “unimportant difference.” 

And that, for me, sums it up. [But, yes, Mr Bernanke refers to it as 'quantitative easing.' Others call it printing money which is not exactly accurate "ee-ther" (or "eye-ther").

You Say 'Tomayto,' I Say 'Tomahto'; Let's Call The Whole Thing Off, Fred Astaire, Ginger Rogers

Original Post 

I don't recall the three reasons the CNBC talking head gave this morning for the surging stock market but two were a) the housing turnaround; b) low interest rates; and, as noted, I forget (c) but it was something similar to "housing turnaround."

It has nothing to do with any of that, of course. It has everything to do with the Fed's qualitative easing (which, of course, is related to (b) low interest rates, but the CNBC talking head did now want to be so clear).

And so it goes. Last week Mr Bernanke said quantitative easing would last "forever" for all practical purposes ("forever" in my investing lifetime).

Disclaimer: this is not an investment site. ["Anonymous" corrected my 'qualitative' easing -- now you know why this is not an investment site. Smile.]

Your Federal Government (NOT) At Work -- This Pretty Much Says It All; Federal Oil Production Down 7% Over Last Five Years; States' Oil Production --> Energy Independence; USA Oil Production Surpasses Saudi's; Another Presidential Speech Coming? Hugo Chavez Dead: Who Attends the Funeral?

 Oil & Gas Journal is reporting:

While US oil and gas production has climbed to its highest level in 2 decades, all of the growth since 2007 has occurred outside federally controlled areas where production actually declined, a recent report from the nonpartisan Congressional Research Service found.

“Where the states have been in charge, we have seen energy development boom in a safe and responsible way, but under federal control we have seen a sharp decline in production,” he declared. “A web of red tape and a backlog of delayed permits are blocking important energy production opportunities on federal lands.”

All of the fiscal 2007-12 US crude oil production increase took place outside nonfederal areas onshore and offshore [incredible], and the federal share of total domestic crude output fell by about seven percentage points during that period, the report said.

So, if the federal government was permitting oil and gas projects BEFORE the sequester, we shouldn't see any difference in permitting AFTER the sequester. 

Let's see: who's been in charge since 2007? Who's taking the credit for America's incredible oil production?

Domestic oil and gas production, which has increased each year President Obama has been in office, is part of his all-of-the-above strategy to develop every available source of American energy.

Slow-rolling the American public. Slow-rolling the oil and gas industry.

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Hugo died. Who will attend the funeral? The president, vice president, SecState, senior senator from Nevada?

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USA surpassed Saudi Arabia in oil production in November, 2012, the first time in a decade.

From CarpeDiem:

However, based on international monthly oil production statistics from the EIA currently available through November 2012, the United States surpassed Saudi Arabia’s petroleum output in November.  

Thanks to the significant increases in shale oil production in North Dakota and Texas, total oil output in the US expanded by more than 7% between August and November, while output in Saudi Arabia fell by 4% during that period. Those trends brought “Saudi America’s” petroleum output in November (11.65 millions bbl/d) above Saudi Arabia’s production (11.25 million bbl/d) by 400,000 barrels per day, and is the first time in more than ten years (since August 2002) that the US has produced more petroleum products than Saudi Arabia.

And back in 2007, Marathon considered the Bakken a "marginal" play.

Hmmmm.... Interesting ..... Active Rig Count

Daily Activity Report

Active rigs: 187

Nine (9) new permits -- (actually an error; only 8 new permits; one of the permits NDIC listed was issued some time ago)

• Operators: EOG (2), CLR (2), Oasis (2), GMX Resources (2),
• Fields: Parshall (Mountrail), Patent Gate (McKenzie), Squires (Williams), Ranch Creek (McKenzie)
• Comments:

Wells that were supposed to come off confidential list did not report any initial production numbers. No explanation provided by NDIC.

One producing well was completed:

• 24241, 1,609, Whiting, Anderson 41-7H, Sanish, t1/13; cum --

There were two DRY holes:

• 21347, DRY, Wesco Operating, Gruman 41-18NENE, a Lodgepole well; Eland, Stark County;
• 22365, DRY, Chimney Sweep, Hondl 21-1NWNE, a Lodgepole well; wildcat, Stark County;

Updates

Later, 2:23 pm: I didn't think I would be updating this post today, but now the active rig number has gone up to 187. Very, very surprising. I haven't been following the details of which operators are adding rigs, or if there are new operators; maybe that's why I didn't see this coming. [I've updated rig county by operator for selected operators; note the number of rigs for XTO.]

Original Post

Active rigs at 186, surprising, I suppose to some ... maybe not so surprising as we move into spring...

Load This On Your MP3 and Listen To It On the Way to Work: The Keystone Decision is Political

Well, duh.

But having said that, it's a nice review of the Canadian oil sands and the Keystone. Lots of trivia, most of which has been posted on the Million Dollar Way, but some new trivia.

Mentions Enbridge and Enterprise and the Seaway, but doesn't mention so many other pipeline projects (new projects and reversals).

Some random data points from the 8-minute audio:

Half of the nation's refining capacity is along the Texas-Louisiana gulf. These refiners require heavy oil.

Both Mexican and Venezuelan oil is declining.

TransCanada has a natural gas pipeline that runs east-west across Canada; it runs at half capacity; TransCanada considering converting that natural gas pipeline to an oil pipeline. He is probably talking about TransCanada's Canadian Mainline:

• 14,101 km (8,762 mi.). 
• Extends from the Alberta/Saskatchewan border east to the Québec/Vermont border and connects with other natural gas pipelines in Canada and the U.S. 

KOG's Comments On a New Completion Method

A reader just alerted me to this SeekingAlpha article. I assume everyone else has seen it; I am probably the last one to have seen it. Smile.

This is a huge story. I read it quickly and have to read it again, but if I understand what I'm reading, all I can say is I have hinted at this, if not stating it outright, for quite some time.

I won't write any more on it now; I have to make sure I'm reading the article correctly. Also, I want folks to read it without my comments.

Huge article. Could be another game-changer for some. I think CLR knew all about it long ago.

For Investors Only: Random Comment On The Market

You know it has to be a great day for the market when the CNBC crawler says CVX is a DOW laggard and a) CVX is up almost a percent; and, b) CVX is near it's all-time high.

Disclaimer: this is not an investment site.

Flashback: The Bakken Is a Marginal Play -- Marathon

Updates

Later, 6:56 pm: this is so coincidental. I linked the article below just to show how far the Bakken has come. Now, I notice the year: 2007. This is the same year that had the all-time high for the stock market -- the record that was broken today. No connection, of course, but the "2007" caught my eye.

Original Post

From an old issue of The Bismarck Tribune, Halloween, 2007:

Steve Hinchman, a senior vice president for Marathon Oil Co. said his company has expanded its oil lease acres in North Dakota and is investing big dollars in drilling the middle Bakken formation of the Williston Basin. Hinchman said $100 oil isn't healthy for anybody and at the same time said energy legislation that favors new taxes will increase the cost of oil and damage the county's competitiveness. There's enough room in the county's current and future energy consumption for all types of fuels, he aid. He said the middle Bakken is a "marginal play," one that requires the company to move quickly from one well to the next and with fewer people.

How things have changed.

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A Note to the Granddaughters

The older granddaughter and I share a lot of time reading and re-reading Moby Dick. From wiki:

Two actual events served as the genesis for Melville's tale. One was the sinking of the Nantucket ship Essex in 1820, after it was rammed by a large sperm whale 2,000 miles (3,200 km) from the western coast of South America. First mate Owen Chase, one of eight survivors, recorded the events in his 1821 Narrative of the Most Extraordinary and Distressing Shipwreck of the Whale-Ship Essex.

Nathaniel Philbrook published the story of the Essex in 2000, In the Heart of the Sea. I have not read that book and probably will not; Moby Dick will suffice.

One thing led to another, and I am now reading Mayflower by Philbrook, the soft cover copyright 2006.

Being from the midwest, I don't recall spending an inordinate amount of time on the Pilgrims in middle school or high school history. Pretty much Squanto, Thanksgiving, and Plymouth Rock is all I remember from my school days, although until reading Mayflower, I had actually forgotten about Squanto, also.

The Mayflower story is absolutely fascinating. I can't imagine anyone on Cape Cod or Boston's south coast not reading this book. For the rest of us, anyone interested in early American history, Philbrick's narrative cannot be beat. I pick books to read based on subject matter of course, but at the end of the day, I won't read a book unless a) it is really good writing; and, b) the esthetics of the book are good (paper, font, feel, binding, etc). And this book exceeds both criteria.

Tuesday Links

Wells coming off confidential list will be posted here.

RBN Energy: natural gas and the last month of winter, 2013

WSJ Links

Section D (Personal Journal): stress

Section C (Money & Investing):
Hess switches track under outside pressure; and I see it as great news for the oil patch

Section B (Marketplace):
Shell to build LNG plants in Louisiana and Canada; Shell -- one of the largest gas producers in the US; will build at Geismar, LA, along the Mississippi River south of Baton Rouge; and on the southern short of Lake Huron, just east of Michigan, at Sarnia, Ontario; each plant - 250,000 tons/year; chilled to minus 260 degrees; small compared to facilities in Qatar, but will represent a doubling of the liquefied-gas manufacturing capacity in the US and Canada; used for transportation overseas, particularly for truck fleets

Shell weighs closing Nigeria oil line; too much theft

Boeing update is relegated to a small note on the back page of section B; not a good sign; headline includes the word "waiting."

Section A:
ObamaNation: New York City leads jump in homeless; 50,000/ night in homeless shelters; hits record in NYC; numbers have grown 1.4% from 2011 to 2012; in Boston, a 7.8% jump in homeless families; in Washington, DC, immune from recessions, homeless families grew 18% over same time period; the numbers in NYC are starker, however -- lots of children; in NYC, 21,000 children, representing 1% of the city's youth slept each night in a city shelter in January, an increase of 22%; homeless families spend more than a year in a shelter, on average in NYC, a rise of 18% from a year earlier; meanwhile the mayor is concentrating his efforts on banning the Big Gulp (which by the way will lead to fewer sales at retailers which has an impact on number of employed);

You have to love the spin: the Israeli government says it has increased travel options for the West Bank Palestinians; Tel Aviv will segregate Palestinians/Israelis on buses from West Bank; the accompany photograph suggests more than "split buses," they need "more buses."

Op-ed: natural gas exports and the mythical 'sweet spot': Congressional meddling so warped the market in 1977 that an emergency law was needed to undo the harm. It's a bit of a stretch, but killing Keystone XL 1.0 and the soaring price of gasoline (twice what it was when the president came into office, and setting new records in February, 2013) suggests similar discussion.