For those keeping score at home:
- Average price of WTI at Cushing, based on daily price, source: EIA; most recent data through December 22, 2014: $61.017
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Non-Bakken News As This Site Comes Down
December 28, 2014: FoxNews is reporting:
Reaction in the three-state region surrounding Vermont Yankee is mixed as the nuclear plant prepares to send its last electrons to the grid in the coming days.
In Vernon, where Vermont's lone nuclear reactor is located, many residents fear more damage to the local economy and to the tax base.
At the plant, employees are readying for retirement, unemployment or transfers to other nuclear plants owned by Vermont Yankee parent Entergy Corp.
Anti-nuclear groups in the region are getting ready to celebrate with a party Jan. 3 at the St. James Episcopal Church in Greenfield, Massachusetts.So, no coal. No nuclear. No crude oil. No natural gas. We're getting down to trees. And used McDonald's French fry oil for Willie Nelson's bus.
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President's Obama's A-Team Taking On The JV Team In The Mideast
The New York Times is reporting:
Maj. Gen. Michael K. Nagata, commander of American Special Operations forces in the Middle East, sought help this summer in solving an urgent problem for the American military: What makes the Islamic State so dangerous?
Trying to decipher this complex enemy — a hybrid terrorist organization and a conventional army — is such a conundrum that General Nagata assembled an unofficial brain trust outside the traditional realms of expertise within the Pentagon, State Department and intelligence agencies, in search of fresh ideas and inspiration. Business professors, for example, are examining the Islamic State’s marketing and branding strategies.
“We do not understand the movement, and until we do, we are not going to defeat it,” he said, according to the confidential minutes of a conference call he held with the experts.
Fortunately for President Obama's A-Team: this is just the JV team.“We have not defeated the idea. We do not even understand the idea.”
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Wells Coming Off Confidential List Through The End of The Year
Active rigs in North Dakota:
| 12/28/2014 | 12/28/2013 | 12/28/2012 | 12/28/2011 | 12/28/2010 | |
|---|---|---|---|---|---|
| Active Rigs | 173 | 187 | 186 | 196 | 158 |
There is no evidence that operators have moved to the sweet spots of the Bakken in light of the price slump. Remember, these wells coming off confidential list this week were drilled six months ago; and, had been planned at least a month or two prior to that.
Wells coming off the confidential list over the weekend, Monday, and through the end of the year:
Wednesday, December 31, 2014
- None -- there was no June 31
- 26623, 1,095, Liberty Resources, Erling 14-7H-0607-15895-MB, Temple, t7/14; cum 69K 10/14;
- 26624, 1,001, Liberty Resources, Alvin 14-7H-1819-15895-TF, Temple, t8/14; cum 46K 10/14;
- 26825, 955, Liberty Resources, Yogi 14-7H-0607H-15895-TF, Temple, t7/14 cum 50K 10/14;
- 26826, 729, Liberty Resources, Edna 14-7H-1819-15895-MB, Temple, t7/14 cum 36K 10/14;
- 27382, conf, XTO, Berquist 31X-2C, Garden, no production data,
- 28154, 1,361, XTO, Gilbertson 34X-26G, Charlson, t11/14; no production data,
- 28178, conf, Hess, HA-Rolfsrud-152-96-1720H-2, Westberg, no production data,
- 28433, drl, Zavanna, Tomahawk 10-3 4TFH, East Fork, no production data,
- 28621, drl, Slawson, Mooka 5-29-20TFH, Big Bend, no production data,
- 24355, 807, CLR, Sutton 3-10H, Oliver, t11/14; cum 3K 11/14;
- 27428, drl, WPX, Roggenbuck 4-9HX, Van Hook, no production data,
- 27737, conf, Oasis, Montague 5601 41-34 6T, Cow Creek, no production data,
- 27429, 692, WPX, Roggenbuck 4-9HA, Van Hook, t11/14; cum --
- 28604, A, CLR, Jamestown Federal 6-17H, Banks, no IP, no production data,
- 28605, A, CLR, Jamestown Federal 7-17H, Banks, no IP, no production data,
- 27790, drl, XTO, Johnson 43X-27H, Murphy Creek, no production data,
- 28378, 1,011, Newfield, Loomer 150-99-2-11-4H, Tobacco Garden, t8/14; cum 38K 11/14;
- 28457, 489, CLR, Gladys 1-20H, Rainbow, t9/14; cum 20K 11/14;
- 27425, 267, CLR, American Eagle, Rick 13-31-164-101, Colgan, t11/14; cum 7K 11/14;
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26623, see above, Liberty Resources, Erling 14-7H-0607-15895-MB, Temple:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 6930 | 0 |
| 9-2014 | 20678 | 0 |
| 8-2014 | 24056 | 0 |
| 7-2014 | 17254 | 0 |
26624, see above, Liberty Resources, Alvin 14-7H-1819-15895-TF, Temple:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 3887 | 0 |
| 9-2014 | 15255 | 0 |
| 8-2014 | 13587 | 0 |
| 7-2014 | 12952 | 0 |
26825, see above, Liberty Resources, Yogi 14-7H-0607H-15895-TF, Temple:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 8731 | 0 |
| 9-2014 | 13367 | 0 |
| 8-2014 | 11118 | 0 |
| 7-2014 | 16935 | 0 |
26826, see above, Liberty Resources, Edna 14-7H-1819-15895-MB, Temple:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 6748 | 0 |
| 9-2014 | 8705 | 0 |
| 8-2014 | 12531 | 0 |
| 7-2014 | 7717 | 0 |
28378, see above, Newfield, Loomer 150-99-2-11-4H, Tobacco Garden:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 14301 | 12026 |
| 9-2014 | 16714 | 0 |
| 8-2014 | 5901 | 0 |
28457, see above, CLR, Gladys 1-20H, Rainbow:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 10-2014 | 10059 | 0 |
| 9-2014 | 9273 | 0 |
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December 28, 2014: the graphic below of the Parshall oil field is quite incredible. We will never know but my hunch is the Parshall will be developed "differently" than originally planned because of the slump in the price of oil. Regular readers will know what I'm talking about. I had six metrics that I was going to be follow: I can't link them now; I've been taking down posts as I take down the blog, and I've forgotten what the six were, but whatever they were, a seventh metric will be: tracking operators of note. The operators that will be canaries in the coal mine will be: price paid for Fidelity's acreage; OXY USA's future in the Bakken; how EOG develops its acreage in the Bakken; Slawson (not publicly traded, so a bit more difficult to follow); Oasis; maybe, Whiting; CLR to some extent.
December 28, 2014: just to clarify -- shutting down the blog has nothing to do with anything that was said. It has to do with the risk of hacking (see below). Some folks have written suggesting that maybe they said something that concerned me; nope, it was all about hacking.
December 28, 2014: as expected, I'm getting a fair number of e-mails about the blog "going off the air." I appreciate that. I won't reply to any e-mail now. I apologize. I'm at a Starbucks and do not have a power cord for my computer so I am on limited power. I will probably reply to some of the e-amail later. I apologize for not replying to everyone.
December 28, 2014: I'm going on hiatus with regard to the blog for awhile. I don't know if after this week I will start it up again or not, but there have been a few indications that the site could be hacked (again) and I don't want to go through that (again). So, we'll see. The number of page views would have gone over 7 million in early January, 2015, but the risk of hacking was not worth waiting for that milestone.
For all I know the Bakken will implode and the state will go broke, but the more I've learned about the Bakken in the last few weeks suggests that the Bakken is in much better shape than people realize. Investors in companies that are operating in the Bakken are doing badly, of course, and I can list a lot of bad things going on in the Bakken, but what list I develop would hold true for the entire oil and gas industry.
Elsewhere people are noting that their royalties are $50/bbl instead of $75/bbl, neglecting to note that most of them inherited their mineral rights, and $50/bbl is still a huge chunk of change. The state of North Dakota could lose its 6.5% production tax revenue, but the state has SO much money in the bank that they won't spend anyway, so what does it matter. Hillary defined the 2010's pretty well: "what does it matter?"
There seems to be an undercurrent of anxiety and perhaps better said, apathy or ambivalence, not only among folks invested in oil and gas, but by everyday folks not invested in the oil and gas industry, about exactly what is happening. I don't think folks really think this low gasoline price is going to last more than a short period of time -- at best/worse, I give it no longer than 3 years.
Having said that, the amount of oil coming out of unconventional oil just in the states is incredible (and that doesn't include all the new plays that I seldom covered), nor does it cover the Canadian oil sands. It's very possible, the price of gasoline could stay "affordable" for a very, very long time.
It's interesting: I have not seen this discussed yet. The Saudis need $87-oil to balance their budget; they have a huge cash reserve so they can go forever giving their oil away. However, if at some point they want to balance their budget, they need to get back to $87 oil. However, that's in "today's dollars" and "today's government budgets." I have not seen any government budget decrease over time in a growing country. In other words, over time, literally every year, Saudi's $87 oil will need to go up a bit.
Meanwhile, the cost of drilling the Bakken, Permian, and the Eagle will go down. I think that's why I'm going on hiatus. I know I'm right on that and I get tired of the pushback from pessimists. LOL. Actually, that's just one irritant. The real reason has to do with the issue of hacking.
I've talked about this before, oil as a commodity. It's the most unusual commodity. There are two cartels: a) OPEC; and b) the US, by virtue of its ban on exporting. Something has to give, and the US ban on oil exporting is not going to end any time soon.
The preeminent oil and gas consultant company has a great slide in one of their December, 2014, presentations: the amount of oil production projected for North America (Mexico, the US, and Canada). One slide and a number of observations. Most folks will concentrate on just one obvious data point, all data in bopd:
- 2010: total North American production -- 10.5 million bopd
- 2020: total North American production -- 16 million bopd
This is the second obvious data point:
- 2010: total Canadian + Mexican production -- 5.2 million bopd
- 2010: total Canadian + Mexican production -- 5.5 million bopd
- yes: essentially flat -- Canadian production rises ever so slightly and Mexican production falls slightly but clearly
This is the third data point that doesn't jump out because of the way the slide is presented:
- 2010: total US production -- 6 million bopd
- 2020: total US production -- 11 million bopd
I have to look it up but I believe the US uses about 9 million bopd; add in 3 million for Canada and Mexico (I have no idea) and the 16 million bopd production in all of North America comes close to what North America is currently using. If I'm high on the Canadian/Mexican usage, throw in Central America for another million. Whatever. The point is, at current projections, there really isn't all that much oil for export from North America.
Which leads to another observation, or actually question? I thought the Canadian oil sands were huge. Why does Canadian oil production stay flat between 2010 and 2020?
Original Post
Over the past couple of years everything I have posted on the blog has been done in good faith, and for the purpose of getting a better understanding of the Bakken.I now have a good feeling for the Bakken, so as of January 1, 2015, I will be closing the blog.
The Parshall is as active as I've ever seen it, with seven rigs, any number of wells on DRL status, and a like number of wells on confidential status:
This is really quite phenomenal.
This is a typical pad: one well completed; one well on confidential status; one well on DRL status, and the fourth well with an active rig:
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A Note to The Granddaughters
Maybe later.
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