Tuesday, October 15, 2013

Director's Comment On Permitting Process In Bismarck

From the October Director's Cut:
Drilling permit activity was up in August and September, and will remain high through October as we help operators plan for winter. The goal is to have a sufficient permit inventory to accommodate multi-well pads through the end of load restrictions in 2014 as well as the time required to deal with federal hydraulic fracturing rules if required.
From my data base:
  • As of today, the NDIC reports 2,054 permits for calendar year 2013. At this rate, there would be 2,603 permits for calendar year 2013. 
  • One year ago, as of October 15, 2012, there were 1,992 permits recorded which put the state on track for 2,525 permits. The state actually issued 2,251 permits for calendar year 2012; about 30 were canceled during the year. 
  • I don't see a whole lot of difference between 2,054 permits and 1,992 permits (actual), or much of a difference between 2,603 and 2,525 (projected).
Disclaimer: my data base may be at variance with the state's database. I often collect this data when I am in a hurry (taking care of the granddaughters) and I generally do not double check my data. It is what it is. I'm a big picture sort of guy and often get the details wrong. Whatever. 

Director's Update On The Federal Fracking Rule

From the October Director's Cut:
Draft BLM regulations for hydraulic fracturing on federal lands were published last year. BLM received over 177,000 comments and withdrew the rule. 
A new proposed rule was published in the federal register on May 24, 2013 and the comment period ended August 23, 2013. This time BLM received 1.2 million comments
Thanks to all who provided comments in support of a “states first” policy.

The Daily Mail Probably Has The Best Analysis To Date Of Where We Stand -- Day 15 Of The Government Shutdown

The link is here.

The top part, in "white," is the news story.

The better part, in "blue," at the bottom, is the analysis. It is incredibly easy to understand and to follow. The Brits, as I've always said, are the best writers in the English language. Among the Brits, I include the English, the Scots, and the Irish, not necessarily in that order.

Director's Cut Is Out; Twelve (12) New Permits; Slawson Has A Great Well In Big Bend

The Director's Cut for August, 2013, data has been posted.

The Dickinson Press reports.

Active rigs: 183

Twelve (12) new permits --
  • Operators: CLR (6), OXY USA (3), SM Energy, Enerplus, Hess,
  • Fields: Antelope (McKenzie),  Sadler (Divide), West Ambrose (Divide), Murphy Creek (Dunn)
  • Comments: that looks like another 6-well pad for CLR; a 3-well pad for OXY USA; Hess has a permit for wildcat in Tioga oil field;
Wells coming off the confidential list were posted earlier today; see sidebar at the right.

Wells coming off the confidential list on Wednesday:
  • 22931, 142, EOG, Redmond 27-3932H, Clearwater, middle Bakken, 8,576 feet; 48 stages; 10 million lbs;  t4/13; cum 49K 8/13;
  • 23066, 261, EOG, Bear Den 102-1708H, Spotted Horn, t6/13; cum 11K 8/13;
  • 23083, 1,828, Whiting, Stenehjem 41-3H, Bully, t4/13; cum 32K 813;
  • 24013, 385, CLR, Mathewson 3-30H,  Oliver, t8/13; cum 11K 8/13;
  • 24267, 107, Samson Resources, Titan 3625-6TFH, Ambrose, t7/13; cum 4K 8/13;
  • 24275, 951, Whiting, Stenehjem 41-3-2H, Bully, t4/13; cum 30K 8/13;
  • 24287, 3,247, Oasis, Morrison 5200 11-30T, Camp, t4/13; cum 47K 8/13;
  • 24307, drl, HRC, Fort Berthold 148-94-29A-32-4H, Eagle Nest, no production data,
  • 24926, 282, OXY USA, Eleanor Twist 2-3-10H-143-95, Murphy Creek, t8/13; cum 9K 8/13;
  • 25050, drl, Slawson, Alamo 3-19-18H, Big Bend,    

22931, see above, EOG, Redmond 27-3932H, Clearwater:

DateOil RunsMCF Sold

23083, see above, Whiting, Stenehjem 41-3H, Bully:

DateOil RunsMCF Sold

24287, see above, Oasis, Morrison 5200 11-30T, Camp:

DateOil RunsMCF Sold

25050, see above, Slawson, Alamo 3-19-18H, Big Bend:

DateOil RunsMCF Sold

The October, 2013, Director's Cut Is Posted; North Dakota Crude Oil Production Hits New High; Up 4% Over Previous Month; Completions Plummet But Oil Production Gains

The NDIC Director's Cut is found here

July oil: 27,147,818 barrels = 875,736 barrels/day
Aug oil: 28,248,511 barrels = 911,242 barrels/day (preliminary)(NEW all-time high)

Remember: "just for the fun of it" I am projecting possible production numbers through the rest of the year at this post. Only because it gets more and more difficult to increase production by more than 2 or 3 percent each month in the Bakken, we will be hard pressed to get to a million bopd by the end of the year. But, based on 2012 figures, if "we" have a decent November, (flat to positive), we could actually see a million bopd by the end of the year. We won't know until the February, 2014, Director's Cut -- the data lags by two months.

With regard to the number of wells and production per well, from the NDIC website and the Director's cut:

Daily oil per well (all wells in North Dakota):
  • 2000: 27 bopd/well
  • 2001: 26 bopd/well
  • 2002: 25
  • 2003: 24
  • 2004: 26
  • 2005: 29
  • 2006: 31
  • 2007: 33 -- The Bakken boom on the ND side of the MT-ND state line began in 2007
  • 2008: 41
  • 2009: 48
  • 2010: 58
  • 2011: 64
  • 2012: 80
Daily oil per well (just the Bakken wells):
  • December, 2006: 35
  • December, 2007: 74
  • December, 2008: 130
  • December, 2009: 124
  • December, 2010: 133
  • December, 2011: 144
  • June, 2012: 144
  • December, 2012: 140
  • June, 2013: 128
From the Director's Cut, today:
The drilling rig count decreased only slightly from Jul to Aug, but the number of well completions fell sharply from 251 to 130. The result still was a 4% increase in oil production because the number of completions was about 1.5 times the threshold needed to maintain production. Completion crews kept pace with drilling rigs as the average number of days to drill a well from spud to total depth remaining steady at about 22, but the average number of days from total depth to initial production rose from 79 to 105.
The significant decline in the number of well completions is probably due almost entirely to pad drilling. I am unaware of any significant weather issues or regulatory issues in North Dakota that could have accounted for that drop from 251 to 130.


I would assume there is going to be a lot of pressure to complete those last few wells on any given pad before winter sets in and slows down fracking. For example: if an operator has 12 wells on a 14-well pad on DRL status, waiting for wells #13 and #14 to reach total depth before fracking all 14 wells, there must be a lot of pressure to get those last two wells to total depth, so all fourteen wells can be fracked. That's a long time for well #1 of those 14 wells to be on DRL status waiting for first production. I read once that at least one operator says they will frack wells on a multi-well pad once a given well reaches total depth, regardless of the status of the other wells. I may be wrong, but it seems most operators wait until all wells on a multi-well pad reach total depth before fracking them all. Again, that's just a wild-ass guess; I could be way wrong.

The NDIC estimates 450 wells are waiting to be fracked, a decrease of 10 from the previous month. It appears many (most?) of these wells waiting to be fracked are due to operational reasons, and not because frack spreads are behind schedule.

Also from the Director:
Drilling permit activity was up in August and September, and will remain high through October as we help operators plan for winter. The goal is to have a sufficient permit inventory to accommodate multi-well pads through the end of load restrictions in 2014 as well as the time required to deal with federal hydraulic fracturing rules if required.
The number of rigs actively drilling on federal surface in the Dakota Prairie Grasslands remains at 0.
Remember: takeaway capacity is adequate with both rail and pipeline. This report covers the month of August. The southern leg of the Keystone XL pipeline should be operational sometime in November. We won't now until January/February time frame how this pipeline will affect production in the Bakken. 

The Permian

One of the nice things about tracking the Bakken as closely as we have over the past four years: it puts other oil fields into perspective.

It certainly appears that 2014 is going to be the Year of The Permian. It is quite interesting to see all the stories coming out regarding this west Texas play.

Another Madison Well Added To "Monster Wells" List

12487, 272, Petro-Hunt, Texaco Otto Boss 18-1, Stockyard Creek, Madison; s8/88; t9/88; cum 662K 8/13;

"Monster wells" are tracked here

The Clock Is Ticking --


Later, 9:35 CT: mainstream media reports -- Senate hopes to announce plan today (Tuesday; vote on Wednesday; House working on own plan. Drop-dead date: Thursday. 
Original Post

The original "drop-dead date" -- the date the US would reach its borrowing authority -- was October 17th, 2013, Thursday, this week. I don't know if that date still holds; I'm not sure anyone really knows, but ..

... if that is still the "drop-dead" rate, I don't see how there will be enough time to do it. The "Senate" is still working on a deal. Technically, it's a group of twelve senators that are working on a deal. Once they announce the deal, the entire Senate needs to vote, which they can do within an hour or so, if pushed. Of course, the Senate will be alerted well in advance to be in their chamber immediately.

But then it needs to be taken over to Congress, the House of Representatives. Everyone better hope the top three Tea Party congressmen have been in the "Senate loop" on this bill; otherwise, they at least need to read some of it, and then let the House leader know how they will vote. The only way they can meet the deadline is to accept the Senate bill "as is." Right now it looks like these compromises:
  • medical device tax will be delayed
  • union members will win a delay with mandatory ObamaCare enrollment
  • debt limit will be raised by an amount to get us to February 15 (after Christmas; before the 2014 campaign begins in earnest
  • funding the 10% part of government that is still not "working"
Actually, it's a pretty good compromise. The "union ObamaCare exemption" is not trivial. 

Tuesday: Update On Samson Oil & Gas North Stockyard Project, The Bakken

Active rigs: 183

RBN Energy: an update on methanol and Valero's new initiative.
It seems like everybody and his uncle are planning new methanol production capacity in the U.S. The economics certainly are compelling.
Low natural gas prices are attracting methanol projects like a magnet, especially to the Gulf Coast; domestic and foreign demand for methanol is rising; and methanol prices are as high as they’ve been in five years.
But companies are always looking for an angle, a competitive edge, a chance to make their project the most cost-efficient—and profitable—of all. Today, in “Cheap Trick: ‘I Want You to Want Me(thanol)’”--we consider Valero Energy’s methanol initiative and its cheap trick: a plan to add 1.6 million to 1.8 million tons per annum (MMtpa) of methanol capacity for an investment of only about $700 million. That’s around half what it would normally cost.
Valero’s ace-in-the-hole? Its planned methanol plant at the company’s St. Charles refinery in Norco, Louisiana, will be fed with syngas - something every methanol plant needs - by the same process that provides hydrogen to its hydrocracker – saving the company from developing the feedstock from scratch.
Jobs in North Dakota, Bakken.com is reporting: no slowing demand for workers.
With “now hiring” signs posted throughout the Bakken, even the agency charged with filling job openings struggles to keep a full staff.
Cindy Sanford, manager of the Williston branch of Job Service North Dakota, is often looking to fill vacancies in her own office while also helping companies find workers.

Sanford began managing the branch on Nov. 1, 2011, a day that is remembered well by anyone who answered phones in Williston that day. An episode of NBC’s “30 Rock” about the jobs available in the boomtown aired the night before, prompting calls from around the country.
“It was just fanatically crazy,” Sanford said.
Although the pace is no longer as intense as it was that day, the number of people who arrive at Job Service every month has stayed fairly consistent, Sanford said. In September, 2,030 job seekers sought assistance at the Williston office, which also serves Watford City, Crosby and the surrounding communities.
“I don’t really see it slowing down a lot,” Sanford said.
Those who take the train or bus to Williston often make Job Service their first stop, sometimes with suitcases or bags in hand.
“The economy elsewhere is suffering,” Sanford said. “This is kind of their last hope.”
I might come back to this story later.

Samson Oil & Gas
Update On The Company's North Stockyard Project

An update on North Stockyard Project, Williams County, ND -- from Yahoo!In-Play
Coopers 2-15-14HBK (SSN WI 27.7%) 
As previously reported, the Coopers well was drilled and cased to a total depth of 17,685 feet. The well will be fracture stimulated in approximately a month's time in conjunction with the Tooheys and Little Creatures wells.

Tooheys 4-15-14HBK (SSN WI 27.7%) 
Tooheys was drilled to a total depth of 18,435 feet and the production liner was run and set at a depth of 18,405 feet. Frontier Rig 24 was released on Wednesday, Oct 9th at 12:00 a.m. The rig was then skidded to Little Creatures 1-15-14HBK. Fracture stimulation operations on the Coopers 2-15-14HBK and Tooheys 4-15-14HBK wells will not start until the Little Creatures 1-15-14HBK well has been drilled to total depth.

Little Creatures 1-15-14HBK (SSN WI 27.7%)
The Little Creatures well was spudded on Oct 11th. The 9 5/8 inch surface casing was set and cemented at 2,190 feet. The rig is currently preparing to drill the 8 ? inch intermediate section. Little Creatures 1-15-14HBK is estimated to be drilled to a vertical depth of approximately 11,120 feet into the Middle Bakken and the lateral portion of the well bore will be drilled to a measured depth of approximately 19,668 feet.

Billabong 2-13-14HBK (SSN WI 24.86%) 
Key Energy Services Rig 370 is continuing workover operations on the Billabong 2-13-14HBK well. To date, the rig has successfully recovered approximately 20% of the drill pipe that was cemented in the hole. Operations will continue to remove the drill pipe using the wash-over assembly method.

Sail and Anchor 1-13-14HBK (SSN WI 25.03%) 
The Sail and Anchor well came on production September 16th following the initial post frac flowback. The well continues to flow naturally on a 24/64" choke averaging 537 bopd. The well has produced 9,700 barrels of oil over the first 17 days.
The Wall Street Journal

 "Senate leaders in striking distance of a deal." And then on to Dallas the House.

It looks like the Afghan history books will someday be writing how the Taliban defeated both the Russians and the Americans. Of course, only the Afghan boys will be reading books then.

Schools are grappling with glitches in computer tablets. That's the headline. The headline writers left off one important word: "program." There is nothing wrong with the tables; the problem is with the implementation of the program:
The Los Angeles Unified School District temporarily took back thousands of tablets from students at three high schools and required the devices to remain on-campus in all 30 schools where the effort had been rolled out. School board officials called a special meeting for Oct. 29 to assess the $50 million first phase of the program ahead of votes to fund the second and third phases.  
Los Angeles school board member Bennett Kayser said the district's initiative was "hastily planned" and several "red flags" were overlooked, such as the potential expense of lost or stolen devices and questions about the completeness of the installed curriculum software. Plus, he added, "There is no silver bullet or Superman here; technology is a tool, not an end unto itself."
State health exchanges have gained some traction, signing up 38,00 for new health care plans, with more then 100,000 new applications.

In the second section, there is a story on why the world's cheapest car, India's Tata Motors, flopped.

 Germany has thrown into turmoil a European plan to tighten carbon-dioxide limits on car emissions, as it seeks to renegotiate the plan to give its luxury auto makers more time to meet the tougher rules.

So, there it is: kind of light in news today, and no mention of Syria. Again.

Note For The Granddaughters

The best story of the day in today's WSJ: a story on model railroading. This story was about ail enthusiasts who prefer to ride their 1/8th size steam locomotives—complete with coal-fired boilers and the requisite huffing and puffing. My story is about HO model railroading and Märklin. I collected Märklin locomotives and rolling stock when we were stationed in Germany over seven years. I probably have over 100 locomotives, most of which I have not seen, stored away for some future day.