Monday, July 27, 2015

Before doing anything else today: check out the photos of the 18-well super pad on the Jeffrey Ranch.

Re-Fracks: Platts is reporting:

If at first you don’t produce, frac, frac again. While hundreds of North American wells remain unfinished due to low oil prices, some operators are embracing technology to refracture horizontal wells in an attempt to eke out more production at a fraction of the cost.

For years, consultants and some oil companies had claimed that the technology, which has been used frequently on vertical wells, wasn’t quite ready to be deployed horizontally.

That may be changing. The drive to tap a potentially vast market for hydraulic refractures of wells — popularly called “refracs” — is getting a shot in the arm as oilfield service companies tout new technology and create what may be the next big industry trend during the current downturn.

“Hundreds of refracs are planned in the US for this year alone,” said Tim Leshchyshyn, president of FracKnowledge, which is building what he said will be industry’s only refrac database.

Although refracs have been performed on thousands of vertical wells for decades to coax more oil and gas bypassed in original completions, they have been less prominent on horizontal wells. Just a few hundred refracs have been tried on horizontals.

Tweeting now: Nigerian oil union says, 'exploration activity has been greatly recessed by the challenge of funding the operating budget' -- #NNPC. Was Nigeria the first Saudi-engineered casualty in the oil war?

Also tweeting now: Algeria's Sonatrach raises August official selling price of Saharan Blend crude oil loading by $0.65/bbl to DatedBrent plus $0.45/bbl.

Also, also tweeting now: Mexico crude oil exports at 1.048 mil b/d in June, down 2.5% on year.

Active rigs in North Dakota:

	7/27/2015	07/27/2014	07/27/2012	07/27/2011	07/27/2010
Active Rigs	73	193	207	182	136

RBN Energy: the cycle of Canadian crude production and discounts.

Western Canadian Select (WCS) – the benchmark for Canadian crude sold at Hardisty in Alberta fetched just $32.29/Bbl on Friday (July 24, 2015) down 60% from $81.34/Bbl a year ago in July 2014. That year has seen big changes in the U.S. oil market with drilling rig cutbacks and declining new production rates. The challenges for Canadian producers have not changed much in the short term – with transport capacity to market still top of the list. Trouble is that every time transport congestion occurs it pushes price discounts higher and lowers producer returns. Today we discuss the relationship between Western Canadian crude production and prices.

SeekingAlpha contributor: oil prices will rebound. (SeekingAlpha will likely remove this article and archive it for subscribers only at some point in the future.)

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Asset Sale

Goodrich Petroleum announces sale of some Eagle Ford assets.

Goodrich Petroleum announced that it has entered into a definitive agreement to sell its proved reserves and associated leasehold in the Eagle Ford Shale in LaSalle and Frio Counties, Texas for $118 million.

The Company is retaining approximately fifty-eight percent (~ 17,000 net acres) of its undeveloped leasehold in the play for future development or sale. The asset being sold produced an average of approximately 2,850 barrels of oil equivalent per day (~75% oil) during the first quarter of 2015.

The Company expects to book a gain of approximately $50-60 million on the sale at closing after factoring in customary closing adjustments. The Company plans to pay off its bank revolver and retain the difference in cash from the sales proceeds.Two data points of interest:

First data point: this article did not say how many net acres were sold (unless I missed it), but working backwards, it sounds like the original net acres amounted to about 30,000 - 17,000 = 13,000 acres sold for $118 million or about $9,000 / acre.

Second data point: note that the production is about 75% oil which is the number I use for the Eagle Ford; in contrast, the Bakken is upwards of 95% oil depending on location.

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Oil Groups Have Shelved $200 Billion In New Projects

Financial Times. And many of these are off-shore projects that will take many years to develop once the price of oil starts to make them economical. All that talk about drilling off-shore of the United States certainly seems moot now.