Random Note On New Flaring Restrictions -- August 17, 2014

I may have been a bit harsh with regard to the effort by the state to reduce natural gas flaring with my comments following the release of the most recent Director's Cut. As of June, 2014, flaring in North Dakota had been reduced from a high of 36% to 28%.

What is the goal and what are the new rules? From an earlier post:

More restrictive regulations covering flaring on existing wells were passed by the North Dakota Industrial Commission – the state’s regulating entity for oil and gas – July 1. 

The goal of the commission is to reduce flaring to 26 percent by the fourth quarter of 2014, 23 percent by the first quarter of 2016, and 10 percent – with the potential of 5 percent – by the fourth quarter of 2020, according to the commission’s website. 

Operators will be restricted to producing 200 barrels a day if they do not collect at least 60 percent of their natural gas. There will be a 90-day grace period for an operator not meeting the new rules to produce at a maximum rate before being subject to a penalty.

The new regulations on existing wells fall on the heels of more restrictive regulations covering flaring on new gas wells, which were approved and went into effect June 1.

Except for the really, really big wells (some like the ones EOG is reporting) the Bakken decline rate is such that 6,000 bbls of oil per month is actually fairly common by the end of the first six months, if not sooner.

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

Warning: with all this data being transcribed, there are likely to be typographical errors. I did not double-check or triple-check every entry. I do this for my personal interest. If something seems wrong, it probably is. Go to the NDIC source if there are any questions. The goal is not to be 100% correct; the goal is to get a feeling for what is going on in the Bakken. 

Down below, I have posted the results of all the wells that came off the confidential list the first seven days after the new rules went into effect. It's a limited number of wells, and not yet a good representative sample, but it's a start.

First the raw data: the first number is the number of bbls of oil produced in the first month of June; the second number is the percent of natural gas flared. Based on the article above, those flaring more than 60% of the natural gas produced at the well will be limited to 200 bopd. So, when you scroll through the numbers below, if the production is 6,000 bbls or less in the month of June, ignore the amount of natural gas being flared. The well is already under 200 bopd.

The second thing to look at is whether a well that exceeds the restrictions is hooked up to a natural gas line; if any amount of natural gas is being sold, then it tells me that at least the well is hooked into the natural gas processing system, and it's a matter of the system's capacity to process the natural gas, but at least the line is in.

• 15K/17%
• 18K/100% -- BR, Corral Creek, but the field is tied into natural gas processing
• 6K/0%
• 7K/0%  
• 9K/0%
• 8K/0%
• 14K/60% -- rounded up, actually slightly less than 60%
• 13K/100% (first 10 days) - remember the 90-day grace period when bringing a new well on line
• 7K/0%
• 8K/0%
• 5K/0%
• 5K/0%
• 7K/0%
• 14K/100% (but 0% previous two months)
• 5K/67% (but well below 60% previous two months)
• 2K/79%
• 0/9%
• 14K/19%
• 3K/0%
• 38K/99% -- the big EOG wells
• 40K/99% -- the big EOG wells
• 3K/100%
• 9K/27%
• 5K/43%
• 11K/44%
• 3K/100%
• 6K/45%
• 9K/0%
• 0/6%
• 1K/100%
• 0/0%
• 9K/100% -- Petro-Hunt, North Tioga field
• 5K/100% 
• 9K/19%
• 14K/14%
• 17K/12%
• 6K/100%

Now some observations:

• of the 38 wells, only a couple exceeded 6K bbls/month and 60% flared natural gas; I believe they were all the incredible EOG wells; EOG has the ability to manage this problem; for me, EOG is a non-issue when it comes to flaring
• a couple of the wells that exceeded the restrictions, had no problem in the earlier months, suggesting this was a non-issue; the wells are hooked up to a natural gas line and processing 100% in most months
• obviously any well flaring right at 60% now will be cut back easily to 59.9% or less; in fact, all of the wells above at 60% flaring -- that was rounded up; they were all about 59.9% (coincidence? I doubt it.)
• Spearfish wells will never meet the 6,000 bbl threshhold
• OXY USA will never meet the 6,000 bbl threshhold
• all numbers were rounded; thus, if you see "6K" you can be assured that the actual number was less than 6,000 bbls, and in a 31-day month, the threshhold is up to 6,200 bbls (in other words, ignore wells with production at 6K or less)
• Oasis appears to be fully on-line; at least with their big wells
• not enough data with regard to KOG to make much comment but soon KOG will be Whiting's problem
• pad drilling will be a big help; generally operators are not producing from any wells on a pad until all wells are completed; this provides a lot of time to get the natural gas pipelines in place

So, unless I'm misreading the rules, or there are other rules in small print, it seems things will be fine in the Bakken with regard to flaring.

Up above, the numbers were just the bbls of oi/percent of natural gas flared; below is the actual list of wells.

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

These are all of the new wells that were reported in the first seven days when the rule went into effect, June 1, 2014 - June 7, 2014. In front of each file number, I've put the production for that well for the month of June, 2014, followed by percent flared:

Saturday, June 7, 2014
15K/17%: 23013, 876, CLR, Sacramento Federal 4-10H, Brooklyn, t4/14; cum 16K 4/14;
No Data yet: 26614, 36, Enduro Operating, MRPSU 29-13, a Madison well, t1/14; cum 2K 4/14;
18K/100%: 26681, 1,844, BR, CCU North Coast 11-25TFH, Corral Creek, t5/14; cum --
No Data yet: 26871, drl, XTO, Cindy Blikre 41X-2C, Lindahl, no production data,

Friday, June 6, 2014
6K/0%: 24927, 1,760, Oasis, Wayne Zumhof Federal 5300 44-15T, Willow Creek
7K/0%: 25221, 2,074, Oasis, Aspen Federal 5300 24-15B, Willow Creek,
9K/0%: 25393, 2,614, Oasis, Augusta 5200 11-28B,  Camp, t1/14; cum 53K 3/14;
8K/0%: 25577, 3,134, Oasis, Ida 5200 21-28B, Camp, t1/14; cum 63K 4/14;
14K/60%:25689, 1,992, Oasis, Crawford 5493 44-7T, Robinson Lake, t12/13; cum 35K 4/14; 
13K/100% (first 10 days): 25693, drl, Hess, BW-Johnson 149-99-1003H-2, Cherry Creek
7K/0%: 25725, 1,468, Oasis, Jase 5892 21-30T, Enget Lake, t2/14; cum 25K 4/14;
8K/0%: 25726, 1,450, Oasis, Mahaila 5892 21-30H, Enget Lake, t2/14; cum 32K 4/14;
5K/0%: 25740, 810, Oasis, Fairfax 6093 12-26B, Gros Ventre, middle Bakken,
5K/0%: 26057, 1,593, Oasis, Montague 5602 42-34 5B, Cow Creek, t2/14; cum 17K 4/14;
7K/0%: 26124, 1,041, Oasis, Lefty 5200 14-30 2T, Camp, t4/14; cum 13K 4/14;
14K/100% (but 0% previous two months): 26178, 1,391, Oasis, Satsuma 5693 44-35B, Alger  
No Data yet: 26179, drl, Oasis, Clementine 5693 44-35T, Alger, no production data,
5K/67% (way below 60% previous two months): 26182, 140, Oasis, Morgan 6093 12-6 1H,
No Data yet: 26738, TA, Hess, Ti-Wao-157-95-14H-1, Tioga, this is a Lodgepole well

Thursday, June 5, 2014
2K/79%: 26474, 52, Corinthian, Corinthian LIndstrom 5-34-1H, Souris, a Spearfish/Madison well 0/9%: 26680, 2,664, BR, CCU Burner 41-26MBH, Corral Creek, t4/14; cum 7K 4/14;

Wednesday, June 4, 2014
14K/19%: 20258, 2,399, KOG, Skunk Creek 3-24-25-13H, Mandaree, t4/14; cum 16K 4/14;
No Data yet: 24758, drl, Statoil, Melissa 31-30 6H, East Fork, no production data,
3K/0%: 25075, 523, OXY USA, Charles Rand 1-6-7H-143-97, Crooked Creek,
No Data yet: 25691, drl, Hess, BW-Johnson 149-99-1003H-3, Cherry Creek, no production data,
38K/99%: 25757, 989, EOG, Wayzetta 35-1920H, Parshall, t1/14; cum 113K 4/14;
40K/99%: 25785, 1,682, EOG, Wayzetta 36-1920H, Parshall, t1/14; cum 126K 4/14;
3K/100%: 26271, 1,346, Emerald, Pirate 6-2-11H, Foreman Butte, t12/13; cum 42K 4/14;
9K/27%: 26472, 1,667, Newfield, Rolfsrud State 152-96-21-16-12H, Westberg, t2/14;
No Data yet: 26629, drl, CLR, Mack 12-2H2, Antelope, a Sanish pool well, no production data,
No Data yet: 26872, drl, XTO, Cindy Blikre 41X-2G, Lindahl, no production data,
No Data yet: 26880, drl, CLR, Lawrence 6-24H1, North Tioga, no production data,

Tuesday, June 3, 2014
25677, drl, Statoil, Lucy Hanson 15-22 6H, Catwalk, no production data,
5K/43%: 25860, 2,716, QEP, Zorro 4-35-26BH, Grail, t1/14; cum 65K 4/14;
11K/44%: 25861, 2,655, QEP, Zorro 3-35-26BH, Grail, t1/14; cum 63K 4/14;
3K/100%: 25893, conf, Hunt, Writing Rock 161-101-30-31H-1, Writing Rock, producing,
6K/45%: 26060, 2,323, QEP, Zorro 27-34-26-35LL, Grail, t1/14; cum 47K 4/14;
9K/0%: 26537, A, Sinclair, Martens 5-5XH, Sanish, no IP or production data,
0/6%: 26679, 1,776, BR, CCU Burner 41-26TFH, Corral Creek, t3/14; cum 4K 4/14;

Monday, June 2, 2014
1K/100%: 26036, 45, Corinthian, Corinthian Skarphol 8-33 2H, North Souris, a Spearfish well No Data yet: 26630, drl, CLR, Mack 22-2H1, Antelope, no production data,
No Data yet: 26873, drl, CLR, Lawrence 7-24H2, North Tioga, no production data,
0/0%: 26928, 1,363, BR, Craterlands 11-14TFH-R, Hawkeye, t3/14; cum 9K 4/14;
9K/100%: 26979, 714, Petro-Hunt, MM Wold 160-94-31A-6-1HS, North Tioga, t4/14; cum 5K 4/14;
5K/100%: 27071, drl, Mountain Divide, Reistad 26-35S-1H, Fortuna, no production data,

Sunday, June 1, 2014
No Data yet: 24754, drl, Statoil, Melissa 31-30 2H, East Fork, no production data,
No Data yet: 24759, drl, Statoil, Melissa 31-30 7TFH, East Fork, no production data,
No Data yet: 25675, drl, Statoil, Lucy Hanson 15-22 5TFH, Catwalk, no production data, 
9K/19%: 26473, 959, Newfield, Rolfsrud State 152-96-21-16-12H, Westberg, t3/14; cum 33K 4/14;
14K/14%: 26510, 1,420, WPX, Mabel Levings 14-23HX, Mandaree, t5/14; cum 2K 4/14;
17K/12%: 26511, 1,64, WPX, Mabel Levings 14-23HB, Mandaree, t5/14; ;cum 3K 4/14;
6K/100%: 26569, 305, KOG, W Nystuen 159-98-15-9-4-2H3, Big Stone, t2/14; cum 9K 4/14;
No Data yet: 26789, drl, Hess, BB-Belquist-150-95-1110H-3, Blue Buttes, no production data,

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

Trivial Observation

I was looking for the 2013 summary of the top oil producers in North Dakota for calendar year 2013, so googled:

top ten producers oil "North Dakota" 2014

I did not immediately find the site I was looking for but in the process I was surprised to see my blog was the #2 hit for that particular google search. The #1 hit: Keystone XL at wikipedia.

Of course, google search is dynamic and results may vary later.