Saturday, September 6, 2014

Snow Accumulation In Seven States, Seven Days -- Including The Bakken -- September 6, 2014; Northwest Passage Closed For Business -- First Time Ever This Has Happened (Except Perhaps Back In The Time Of The Vikings); USC 13 - Stanford 10

A feel-good article: Americans' addiction to oil is growing. Salon is reporting:
Considering all the talk about global warming, peak oil, carbon divestment, and renewable energy, you’d think that oil consumption in the United States would be on a downward path. By now, we should certainly be witnessing real progress toward a post-petroleum economy.
As it happens, the opposite is occurring. U.S. oil consumption is on an upward trajectory, climbing by400,000 barrels per day in 2013 alone — and, if current trends persist, it should rise again both this year and next. [The Bakken can handle this, producing a million bopd.]
In other words, oil is back.  Big time.  Signs of its resurgence abound.  Despite what you may think, Americans, on average, are driving more miles every day, not fewer, filling ever more fuel tanks with ever more gasoline, and evidently feeling ever less bad about it.  The stigma of buying new gas-guzzling SUVs, for instance, seems to have vanished; according to CNN Money, nearly one out of three vehicles sold today is an SUV.  As a result of all this, America’s demand for oil grew more than China’s in 2013, the first time that’s happened since 1999.
Oh, Mr Salon, don't sound so forlorn, China will come back. Another favorite:
Accompanying all this is a little noticed but crucial shift in White House rhetoric.  While President Obama once spoke of the necessity of eliminating our reliance on petroleum as a major source of energy, he [Mr Obama] now brags about rising U.S. oil output and touts his efforts to further boost production.
The article is pretty good. Some inconvenient truths overlooked. This is one of my favorite:
While emissions from domestic [repeat, domestic] [repeat, domestic] coal use are likely to decline in the years ahead, in part due to new rules being formulated by the Environmental Protection Agency, the expected rise in emissions from oil and natural gas use will wipe out these gains, and so total U.S. emissions are expected to be higher in 2040 than they are today, according to the EIA. As a result, we can expect little progress in international efforts to slow the advance of climate change and a steady increase in the frequency and intensity of storms, floods, fires, droughts, and heat waves.
Well, maybe that's all accurate, if one is shortsighted only to look at domestic coal. I doubt the rest of the world would follow the US lead on energy. Even Germany is returning to coal. The reality:
By 2018, world coal usage will increase by 584 Metric tonnes (2,200 lbs/metric ton) with new coal generation of 198 GW from power plants: Chinese 66 GW; India 71 GW; other SE asia 33 GW: Europe 12 GW; and, Africa 12 GW.
[Putting the 198 GW in perspective: the US produced 318 GW from coal in 2011; 415 GW from natural gas. The world, in the next three years or so, is going to add half-again-as-much coal generated power as the US currently uses. To cut global CO2 emissions significantly, the world has to stop all new electricity generation. LOL. ]

If you go to the link, you need to register (free); it's easy.

Gasoline demand / gasoline stocks data tracked here

Maybe We Need To Move More Quickly
Maybe We're Not Using Enough Coal?
"Northwest Passage Closed For Business" -- First Time Ever

National Ice and Snow Data Center is reporting:
Several recent years have seen remarkably open conditions in the Northwest Passage by the end of August.
This year, however, much of the passage is clogged with ice, and even the circuitous Amundsen route is not entirely open. (Note that Amundsen required two summers to navigate this route in 1905; Amundsen wintered over in the hamlet of Gjoa Haven—now called Uqsuqtuuq).
The recent openings of the Northwest Passage in 2007, 2008, 2010, and 2011 were associated with high sea level pressure anomalies over the Beaufort Sea and Canadian Basin. This atmospheric pattern essentially displaces the polar pack away from the M’Clure Strait, resulting in minimal ice inflow from the Arctic Ocean.
In contrast, weather patterns this year have been more moderate, and as a result, more ice remains in the Northwest Passage. As of the end of August 2014, ice area in the passage was tracking above the 1981 to 2010 average. Ice area over the summer of 2013 tracked slightly below the 1981 to 2010 average, but was considerably higher than the years prior. The summer of 2011 saw the lowest ice area in the Northwest Passage since 1968.
Have you ever noticed that climatologists can speak in a quiet voice, reporting data, and not to have to yell to get your attention?

Snow In The Bakken

I assume it happened all the time when I was growing up, but I do not recall snow accumulation in North Dakota in September, but here we go. Dr Roy Spencer is reporting:
Looks like September snows — not even mountain snows — over the northern tier of states spreading eastward from Montana and North Dakota starting Tuesday night.
The latest GFS model total snow accumulation by next Saturday shows snow for Montana, Wyoming (mountains only), the Dakotas, Minnesota, Wisconsin, and Michigan.
After his original post, the Dr Spencer provided an update:
UPDATE: Here’s a plot [at the linked site] of the average times of first snow…as you can see, the predicted snow is about a month early.
 Ah, yes, isn't global warming wonderful?

USC 13 Stanford 10

An incredible game.

And Oregon: 46 -- Michigan State: 27.

Filling The Void
Icebreakers Required

The US has pretty much ceded the Arctic to the rest of the world (previously posted). Russia is taking advantage of the situation (while all eyes are on the Ukraine, and the golf links). Yahoo is reporting:
Russia on Saturday sent six ships carrying personnel and equipment to a Soviet-era military base in the Arctic that it is reopening to bolster its presence in the region, Russian news agencies reported.
Moscow is ramping up its military presence in the pristine but energy-rich region as other countries such as Canada and Norway are also staking claims to access its resources. [Of note: the US is not mentioned.]
President Vladimir Putin last year ordered the military to return to a base on the far-Northern New Siberian Islands that was abandoned in 1993.
On Saturday, a fleet of six ships including two large landing ships set off from the port of Severomorsk in northern Russia, a spokesman for the Western military district, Vadim Serga, told ITAR-TASS news agency.
The ships will be accompanied by several icebreakers.
Abandoned in 1993. Hmmmmm .... filling the void. SecDef Hagel's priority is drawing down the US military after two highly successful wars in Iraq and Afghanistan. Putin has other priorities.

A Tool For Tracking Your Bakken Royalties -- September 6, 2014

A reader has sent me the link to his "royalty-tracking" tool / website.

The link:

This is the background from the reader:
The service evolved from my work in monitoring our family’s mineral interests.
Early on I designed a excel spreadsheet and would manually input the monthly production data and cross reference the royalty check statement with the NDIC data. Only a few months after starting to monitor the wells, I spotted a substantial disparity (over 8,000 bbls) between the royalty check statement’s barrels sold and the NDIC’s barrels sold.
I contacted the oil company and was initially told they would look into it. Months passed without any action and then quietly a correction was made to a monthly royalty check with no explanation as to why.
I then decided that I needed to pay closer attention to what was happening with our minerals on a continuing basis. At first it was exciting and easy to monitor a few individual wells each month, it was like a birthday present every 30 days. As the development of the Bakken continued and the drilling progressed from lease holding to field development, the time spent monthly to manually input the data into the spreadsheet started becoming a part time job.
That was the point that the idea for myRoyalty Report was born. A friend was also interested in the Bakken activity and had the computer/web skills to automate the collection of data process for my spreadsheet. After some initial trial and error we decided to make the process purely a web based activity.
Soon family friends that have mineral interests were asking if I would help them monitor their interests also.
With their feedback, we continued to refine the website and decided to build a business around the service and open it up to any North Dakota mineral owner that is interested in monitoring their minerals.
The website provides data tailored specifically to a client’s current production data, royalty check verification, historical production data, monthly & life of well charts and a file cabinet for storage and easy access to their lease specific details. If you are interested in seeing what the website has to offer, please visit the site, and click the sign-in button in the upper right corner. We have set up a sample account for people to explore the website.
I don't own any mineral rights, but anything that might help others, I am glad to post or link such tools (as long as there isn't much of a monetizing component to the site).

I've said many, many times: if you are receiving royalties from one Bakken Pool well, you will eventually have four wells; probably 8, and possibly 12 or more. A financial adviser puts it this way for farmers who still own their mineral rights in the Bakken: you are no longer a farmer; you are an oil man (or woman).

My hunch is that many folks have developed their own tools for tracking their wells, but I still suggest that once you have four or more wells, you should have professional assistance.

Back to the linked "royalty report." A similar thing happened to me. When I first started following the Bakken, I wanted to track it using Microsoft Word. However, it quickly became clear that a web-based system would work much, much better. I went from Microsoft Word to html (the blog), and decided that I might as well share it with others who want to learn more about the Bakken, at least as I understand it.

The best thing that came out of posting my information on the internet: all the news and links that readers send me. A huge "thank you" to all.

Data Points From Oasis Most Recent Presentation - September 6, 2014

Link here.

These data points taken from the August, 2014, presentation.

The high points for me, from this presentation as well as others:
  • the wells are coming down in cost, but will likely rise again going forward due to new completion techniques
  • new completion techniques: high volume proppant and SlickWater
  • high volume proppant and SlickWater will add $1.5 million to 2.0 million+ to complete a well
  • additional completion costs will be offset by lower drilling costs (but probably not by much)
  • high volume proppant and SlickWater raising EUR curves by 35% (this number seems consistent among three operators) 
  • with two dedicated frack spreads, Oasis still completes less than 40% of their own wells with their own folks
  • in future earnings conference calls, analysts need to be asking about the cost of shipping proppant to the Bakken
I doubt much has changed from earlier presentations, but I have a few minutes before I leave for soccer.

Random data points (some numbers rounded).

Bakken (Montana/ND)
  • 505,960 net acres
  • 17 years of inventory
  • 2Q14 production: 44K boepd
  • 3Q14: 47 - 49K boepd
  • proved reserves: 220 mmboe/ PV-10 of $5.2 billion
  • West Williston : 362,000 net acres
  • East Nesson: 145,000 net acres
  • highest working interest: 68% average WI
Plans to advance/expand infrastructure development
  • double Oasis Well Services
  • grow Oasis Midstream Services
Operations (2014)
  • 16 rigs
  • further TFS delineation
  • loe: $8.50 - $10.00/boe
  • mg&t: $1.20 - $1.60/boe
Rig allocation
  • Montana: 2
  • West Williston: 8
  • East Nesson: 6
Well completion costs
  • 2012: $9.7 million
  • 4Q13: $7.9 million
  • 1H14: $7.6 million
  • vary across the Bakken: 450K boe to 750K boe
  • 35% production uplift seen using SlickWater in Montana (Hebron)
Very early in TFS delineation
  • the economic boundary of the TFS is expanding (slide 10); it's possible the Cottonwood field will benefit (TF2 and TF3)
  • 1st TFS well produced 37% better than comparable well
  • 1st Montana well produced 35% better than Montana type curve
Frack spreads
  • 2nd frack spread at 100% utilization as of August, 2014
  • 2 spreads will complete up to 40% of Oasis completions
  • OWS first spread has returned 2.8x the cash invested into business since inception

This Global Warming Has Been A Blessing For Midwesterners: Fort Peck Reservoir Rose More Than 2 Feet In August; Second Highest August Runoff Into Fort Peck In Its History; Army Corps Releasing More Water; September 6, 2014

Remember this headline and link from earlier this year, April 12, 2014: More Snow For Montana; More Water For Lake Sakakawea -- Will This Winter Of Global Warming Ever End?
Yesterday I noted that the US Army Corps of Engineers releases enough water from Lake Sakakawea in 14 hours to frack every Bakken well that will be drilled this year.

Now, even more snow for Montana is predicted -- and when it all melts, most of it flows down the Yellowstone and the Missouri, to end up at Lake Sakakawea, adding to even more USACE run-off.
There was additional background at this post.

Now, even more waterThe Billings Gazette is reporting:
With near-record runoff into Fort Peck Reservoir in August — 170 percent of normal — the massive lake in northeastern Montana rose more than 2 feet, according to the U.S. Army Corps of Engineers.
The Corps manages the upper Missouri River Basin series of dams from Fort Peck downstream. Agency officials announced the numbers during a Friday conference call.
It was the second highest August runoff into Fort Peck in its history, totaling 899,000 acre feet — an area equal to about 1,400 square miles. An acre foot is the amount of water it takes to cover one acre in 1 foot of water. The highest August runoff into the reservoir came in 1993, when 981,000 acre feet poured into the lake.
All of the water came from rain that fell at a rate about 400 percent above normal.
“August runoff was the third highest since 1898,” said Jody Farhat, chief of the Missouri River Basin Water Management Division.
One can track the release of water from a down-river dam -- the Garrison Dam -- at this site. Over the next three days, the average Garrison Dam release will be 26,000 cfs (cubic feet / second). To understand this number, here is a report from earlier this spring (from one of the links above):
Jody Farhat, water management chief for the corps, said plans are to step up releases through Garrison Dam from the current 18,000 cubic feet per second to 24,000 cfs by April 15 and 25,000 cfs by the end of the month.
Farhat said May average releases should be around 27,000 cfs and 30,000 cfs for June. 
She said that would mean a 2-3 foot increase in the level of the Missouri River through Bismarck and Mandan.
Exciting times.  I find it amazing what the global temperature increase of 0.85 degree in a century can result in; the warmists all predicted more snow and more rain.

Blue Whales Saved By Global Warming

Two data points.

The Los Angeles Times is reporting:
Good news, whale lovers: A new analysis suggests that there are as many blue whales living off the coast of California as there were before humans started hunting them to near extinction 110 years ago.
Today, there are roughly 2,200 blue whales who range from Mexico in the south to Alaska in the north. In the 1930s, that number was closer to 750.
The University of Washington is reporting:
Following rapid warming in the late 20th century, this century has so far seen surprisingly little increase in the average temperature at the Earth’s surface. At first this was a blip, then a trend, then a puzzle for the climate science community.
More than a dozen theories have now been proposed for the so-called global warming hiatus, ranging from air pollution to volcanoes to sunspots. New research from the University of Washington shows that the heat absent from the surface is plunging deep in the north and south Atlantic Ocean, and is part of a naturally occurring cycle. The study is published Aug. 22 in Science.
Subsurface ocean warming explains why global average air temperatures have flatlined since 1999, despite greenhouse gases trapping more solar heat at the Earth’s surface.
Oh, speaking of which, the rising sea predicted by warmists. Doesn't exist. Not a lot of people know that is reporting, based on graphs even my granddaughters can interpret:
It does not take a genius to work out that sea levels have actually declined in the last decade or so. At the longest running gauge in Honolulu, NOAA offer a comparison of 50 yr trends.
Again, these graphs are from the NOAA, the official US government "global warming" agency.

I can't make this stuff up. A big thank you to all the sources providing this data and the links.