Wednesday, July 15, 2015

Seven (7) New Permits -- North Dakota -- July 15, 2015

The US has been the world's largest petroleum producer for 29 months in a row. -- AEI, link here. And the US president has not mentioned one word. No one in America knows this. Even I did not know this until a reader sent me this link.


Note: there may be more typographical and factual errors than usual. The posts for the past 48 hours have been done quickly; the posts over the next 12 hours will be done even more quickly. If any of this information is important to you, go to the source. This is not an investment site. Do not make any investment or financial decisions based on anything you read here or think you may have read here.


Active rigs:

Active Rigs74194186215178

Wells coming off the confidential list Thursday:
  • 28964, 1,019, Hess, LK-Erickson-147-97-1102H-2, Little Knife, 35 stages, 2.4 million lbs, t5/15; cum 23K 5/15;
  • 29963, drl, SHD, Magnum 36-12-MB2, Clarks Creek,
  • 30216, drl/NC, XTO, Thompson 44X-20EXF, Blue Buttes,
  • 30272, conf, SM Energy, Stenehjem 14X-9HB, Poe, SI/NC
Seven (7) new permits --
  • Operators: BR (2), Whiting (2), SM Energy (2), CLR
  • Fields: Elidah (McKenzie), Brooklyn (Williams), Moraine (Divide), Whiteaker (Divide), Sanish (Mountrail), Antelope (McKenzie), Juniper (McKenzie)
  • Comments:
Crescent Point Energy canceled one permit, an Aldag permit in Divide County.

Kinder Morgan On The Move, Raises Dividend

Reuters is reporting:
Kinder Morgan Inc said it would buy the 49 percent stake that it does not already own in natural gas joint venture Elba Liquefaction Co from Royal Dutch Shell Plc, and it raised its dividend.
Kinder Morgan said it expects to invest $630 million in Elba terminals, bringing its total investment in the project near Savannah, Georgia to $2.1 billion.
The deal shows the energy sector's appetite for fast-growing natural gas logistics and exports. Marathon Petroleum Corp bought natgas processor MarkWest Energy Partners LP in a $15.6 billion deal earlier this week.
Dividend also moving:
Kinder Morgan, which last year put all of its publicly traded partnerships into one corporate parent company, raised its quarterly divided by 14 percent to 49 cents per share.
The company said it continued to remain on track for 2015 dividend target of $2 per share.
All the recent natural gas deals tell me that:
a) in this country, coal is pretty much being taken off the grid as quickly as possible; and, 
b) wind and solar won't come close to making up the difference
In another article, Reuters reports that KMI profits drops almost 30% but still raises dividend. The dividend was raised minimally (14%) but the company says it's on track to keep raising dividend to previously announced level. With investors in oil and gas companies, raising the dividend was a very, very smart thing to do.

CLR Completes A Mega-Frack

The "headline" of the article at the link below does the article an injustice. This is an incredible article that anyone interested in the Bakken needs to spend a lot of time on.  (Archived)

Mike Filloon provides this incredible interesting article over at Seeking Alpha:
  • Continental Resources estimates production uplift of 25% to 45% per well using slickwater and hybrid well designs.
  • Current well results point to better results due to well design and high-grading.
  • Mega-fracs are not only improving well production, but also an uplift in production is being seen from adjacent locations.
  • We believe that production increases will allow Continental to produce at a much lower realized oil price, but more importantly, decrease the number of completions and maintain production levels. 
From the article:
Continental has not only seen a 20% improvement in well costs from $9.6 million to $7.7 million, but also has increased EURs to 800 MBoe. For those unfamiliar, EURs are estimated ultimate recoveries. This is the estimate of total resource garnered over the life of the well. Estimates like this vary significantly by operator.
When modeling production, calculations of well life can be 30 or 40 years, and small deviations from this can translate to significant changes. EURs should be looked at as estimates. Since those estimates are over long time frames, its importance may not be great. The focus should be on immediate improvement.
EUR improvements can also be due to location. If more wells are drilled in the core, this will also affect production per well. We focus on one to two year production as this has a greater effect on stock prices. Horizontal production is heavy on the front end. 19% of total production occurs in the first year. Half of that number will occur somewhere between 3.5 and 4 years. We believe payback times are more important, as the sooner a well is paid for, the quicker revenues can be focused on new locations.
When I have some time, I might throw in my 2-cents worth on this EUR issue in the Bakken. Regular readers probably already know what I'm thinking.

Traders Doubt HAL-BHI Proposed Merger Will Be Closed By End Of Year
Regulators Scrutinizing Deal

Link here.

Not a bit surprising.
Typhoon Update

Unless I'm missing something, the typhoon off western Mexico, south of Baja California seems not have moved much all day; still circling off shore. Dynamic link.

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