Monday, February 23, 2015

Random Update Of Abraxis Ravin Wells In North Fork -- February 23, 2015

The Abraxas Ravin wells:
  • 19054, 1,008, Abraxas, Ravin 26-35-1H, North Fork, t1/11; cum 155K 12/14;
  • 21994, 658, Abraxas, Ravin 26-35-2H, North Fork, t2/13; cum 55K 12/14;
  • 21995, 706, Abraxas, Ravin 26-35-3H, North Fork, t2/13; cum 76K 12/14;
  • 26885, 1,141, Abraxas, Ravin 26-35-4H, North Fork, t10/14; cum 66K 12/14;
  • 26884, 1,395, Abraxas, Ravin 26-35-5H, North Fork, t8/14; cum 85K 12/14;
  • 26883, 1,594, Abraxas, Ravin 26-35-6H, North Fork, t9/14; cum 88K 12/14;
  • 26882, 1,473, Abraxas, Ravin 26-35-7H, North Fork, t9/14; cum 75K 12/14;
  • 29780, conf, Abraxas, Ravin 8H, North Fork, 
I track the North Fork oil field here.

Over the Rainbow, Theremin

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An Inconvenient Truth

At the 2015 Academy Awards ("the Oscars") "equal pay for women" had another 15 minutes of fame. Mark Perry over at Carpe Diem noted Hillary's own "pay gap" problem:


I wonder what Pocahontas pays her staff?

QEP And SM Energy Report Tuesday -- February 23, 2015

AAPL hits record high today.

Reporting Tuesday:
First Solar (FSLR), forecast 76 cents; after market close:
QEP, forecast 25 cents; after market close;
SM Energy (SM): forecast $1.09, after market close;
Windstream (WIN): forecast 3 cents, before market open;

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Minor notes on the Bakken

The Abraxas Ravin wells came in very nicely. Link here

CLR's Limousin wells are on "inactive" status.

Interesting production profile:
  • 27576, 1,808, Statoil, Barstad 23-14 7TFH, t11/14; cum 6K 12/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20141188230773729363
BAKKEN11-2014534446180722012199
BAKKEN10-20144518550154816310803108


 The following well on "inactive" status after first month of production:
  • 27712, IA/1,896, Statoil, Syverson 1-12 7TFH, Stony Creek, t12/14; cum 2K 12/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-2014310200138000
BAKKEN11-201430179015907564000

 Note production profile:
  • 27274, 346, Slawson, Cruiser 3-16-9H, Big Bend, t7/14; cum 87K 12/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20141459025239391146283984574
BAKKEN11-20142915141152533405921024256640
BAKKEN10-20142716140165333039817543703670
BAKKEN9-201430163131622740061002198710
BAKKEN8-2014312357823516777914026138710
BAKKEN7-201417955686342740519951140

 Note production profile:
  • 27273, 725, Hess, EN-Hermanson-LE-155-93-3501H-1, Robinson Lake, t9/14; cum 38K 12/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-201412137418347247246710
BAKKEN11-201430926492565526799976990
BAKKEN10-201431135381545298531237011790281
BAKKEN9-201415141891173611823133301332821

 Note production profile:
  • 27422, 1,163, XTO, Lyla 24X-10E, Lindahl, t11/14; cum 5K 12/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-20145171317136281140001353
BAKKEN11-201412363536359749457504463

Confusion Starts With The Name -- February 23, 2015; Why Is The "Press" So "Down" On North Dakota's Success? -- IBD

Why is the press so "down" on North Dakota's success. Investor's Business Daily is reporting:
The unemployment in North Dakota is a mere 2.8%. The average hourly wage there has climbed 18% since 2009 — more than double the national average. And despite its oft-perceived inhospitable climate, the state's population jumped 11% over those years (vs. 4% nationwide).
And pretty much all of this growth has been driven by the oil production boom, which resulted from the ability of oil producers to recover vast amounts of previously inaccessible oil through fracking.
So what does the Los Angeles Times decide to write about? Increased drug use on an Indian reservation.
It's interesting that a business publication actually wrote something on this. By the way, that's why I seldom post anything "negative" about the Bakken; it's so easy to find those articles elsewhere.

I'm not a psychiatrist so I cannot hypothesize why the press is "so down" on North Dakota's success; I'm sure there's a psychological explanation. East Coast psychiatrists probably have a big word for it. For most North Dakotans, I suppose, jealousy comes to mind. 

And another "by the way." I follow a lot of mainstream media publications. I think the general consensus of many Americans is that the New York Times is the most "liberal" big-city / major mainstream daily newspaper. Not true by a long shot. The Los Angeles Times is much more liberal. So, it's not a bit surprising that the writer of the Investor's Business Daily quoted The Los Angeles Times.

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What's In A Name?

Just because you have Islamist in your name does not mean you are an Islamist organization. If that is accurate, I suppose that just because someone says he's a Christian does not necessarily mean he's a Christian. I was reminded of that when reading this story: why are Americans confused about the president's religion. The confusion crosses political lines:
In June, 2012, Gallup asked, "Do you happen to know the religious faith of Barack Obama?" Forty-four percent said they did not know, while 36 percent said he is a Christian, 11 percent said he is a Muslim, and eight percent said he has no religion.
The "don't know" group included 36 percent of Democrats. (A larger number of Republicans, 47 percent, said they didn't know Obama's religion, as did 46 percent of independents.)
You know the name: Barack Hussein Obama II.

[Update: just a few days after posting the above about "what's in a name," FoxNews reported that a darling of the Obama administration in the bluest of blue states has also "confronted" the president on the issue of "what's in a name."]


You Know My Name, The Beatles

OKE Earnings Are Better Than Okay -- February 23, 2015; 4/4 Wells Go To DRL Status

OKE earnings, forecase 36 cents: fourth-quarter 2014 net income attributable to ONEOK of $94.5 million, or 45 cents per diluted share, which includes income from discontinued operations of $0.8 million.
Fourth-quarter 2013 net income attributable to ONEOK was $90.7 million, or 43 cents per diluted share, which includes income from discontinued operations of $17.1 million, or 8 cents per diluted share.
Income from continuing operations attributable to ONEOK was $93.7 million in the fourth quarter 2014, compared with $73.7 million in the fourth quarter 2013.
Active rigs:


2/23/201502/23/201402/23/201302/23/201202/23/2011
Active Rigs126187181204168

Wells coming off confidential list were posted earlier; see sidebar at the right.

Wells coming off the confidential list Tuesday:
  • 28016, drl, Petro-Hunt, USA 153-95-22D-15-5H, Charlson, no production data,
  • 28412, drl, Hess, SC-JCB-154-98-1720H-2, Truax, no production data,
  • 28777, drl, Slawson, Holst 2-33MLH, Big Bend, no production data,
  • 29151, drl, Slawson, Rainmaker Federal 10-36-25TF2H, Big Bend, no production data,
Nine (9) new permits --
  • Operators: BR (4), Whiting (3), EOG (2)
  • Fields: Corral Creek (Dunn), Twin Valley (McKenzie), Parshall (Mountrail)
  • Comments:
Oasis canceled six (6) permits:
  • 27643 - 27645: Banks permits in Mountrail County
  • 24971: Celia Horob in Williams County
  • 24907: Jenny Vaughn in WIlliams County
  • 26451: Ranger in McKenzie
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Water Project To Go Forward

Bakken.com is reporting:
An expected reduction in state oil tax revenues due to a global drop in oil prices could mean less money for the Northwest Area Water Supply project.
Gov. Jack Dalrymple’s budget included $18 million for NAWS, but the Legislature is considering $10 million. However, there still should be enough money to go ahead with a proposed $20 million expansion of the city’s water treatment plant.
The $14 million remaining from the current two-year budget and $10 million in new funding would bring the total to $24 million, more than enough to pay for design and construction at the water plant.
The NAWS project is to bring Missouri River water to northwestern North Dakota. Officials in Missouri and Canada have held up the project in the courts for years over environmental concerns, but a federal judge is allowing some construction work to proceed because the upgrades are needed in the area that’s on the edge of the oil patch.
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RBN Energy, Part 2, Refiners
Link here
While producers are licking their wounds after a more than 50% oil price crash, refiners have continued to enjoy healthy margins – even in the face of the largest refinery strike since 1980. Strong refining margins, supported by an ongoing boom in refined product exports, continue to encourage high levels of refinery utilization in the Gulf Coast region – home to more than 50% of U.S. refining capacity. Today we look at how Gulf Coast refiners are faring after the oil price crash.
In Episode 1 of this two part series we noted an uptick in domestic U.S. demand for gasoline and distillates during December 2014 and January 2015, presumably spurred by lower prices following the crude price crash during the latter half of 2014. That surge in demand goes against a longer-term decline trend in the use of these fuels and it remains unclear if it will be sustained in 2015.
What is clear from looking at crack spreads for a typical Midwest refinery is that refiners are still prospering in that region even as the upstream side of the hydrocarbons business suffers after the crude price crash. Midwest refiners have been used to making good margins over the past three years because of their access to cheaper advantaged crude. Following the crude price crash the spread between prices for inland and coastal crudes declined – removing most of that advantage.
However, refiners still fared well by benefitting from the lag between refined product prices (slower to fall) and crude. Now the growing crude surplus being added to Cushing inventories to take advantage of contango market storage will likely keep the lid on Midwest crude prices to the benefit of refining margins.
In this second installment we take a closer look at how Gulf Coast refineries are weathering the crude price crash.
The Gulf Coast region is home to more than 50% of U.S. refining capacity (over 9 MMb/d) but has only in the past two years begun to take full advantage of the shale era boom in U.S. domestic crude production.
While – as we described last time - Midwest refiners have enjoyed access to low priced advantaged crude since 2011, Gulf Coast refiners had to await the build out of pipeline and rail infrastructure to get access to cheaper crude supplies. Nevertheless, as we detailed in a two-part analysis last April, Gulf Coast refineries have enjoyed an export led boom since 2012 - largely driven by increased demand for diesel from Latin America.
And although some of that boom was driven by lower U.S. crude prices, Gulf Coast refinery sophistication and lower fuel costs (using cheap natural gas) were equally important ingredients for success. In the past two years as infrastructure was built out, Gulf Coast refineries became destination central for a flood of new domestic and Canadian production looking for a market.
This year new pipelines such as the 300 Mb/d Magellan/Plains BridgeTex from the Permian Basin and the Enbridge/Enterprise 450 Mb/d Seaway Twin from the Midcontinent continue to increase crude flows to the Gulf Coast.
These new flows are competing with and gradually replacing imported crude supplies. However, a mismatch between refineries configured to process heavy crude and an incoming surplus of lighter crudes has kept downward pressure on crude prices –leaving refiners in the cat bird seat to pick and choose from among competing suppliers and make limited capital investments to increase their throughput of lighter crudes.
 Again, this article will be archived at the source.

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The Oscars

My wife loves the Academy Awards; it might be the only show for which she might skip my funeral. LOL. I very much enjoy watching it with her, but I doubt I would watch it alone. I was thrilled to see The Grand Hotel Budapest won four Oscars, tying with Birdman, for most Oscars, 2015:
The film won the Golden Globe Award for Best Motion Picture – Musical or Comedy and garnered three more Golden Globe Award nominations, including Best Director for Anderson. It also garnered nine Academy Award nominations, the joint most for the ceremony, including Best Picture and Best Director. It won the Academy Awards for Best Production Design, Best Original Score, Best Costume Design and Best Makeup and Hairstyling.It tied with Birdman or (The Unexpected Virtue Of Ignorance) for the most wins (4) this year.
I love GHB; when I get in the mood to see it again, I will watch it three or four or five times in succession over several days.

I did not see Birdman. Some big name actors -- Naomi Watts, for example.

I haven't seen American Sniper; something tells me the Academy was uncomfortable with it. The Academy is about 75% white male; median age about 62 years old.

I don't know how a show-opening joke about the white audience went over for the Oprah Winfrey crowd. But according to the critics it was a joke that had to be done. Sort of "check that box," "get that out of the way," and then get on with the show.

Best part of the evening for me: GBH winning four Oscars early in the show. Best part of the evening for my wife: Eddie Redmayne, best actor, for his portrayal of Stephen Hawking. I can't argue. Absolutely incredible.

Biggest snub: not including Joan Rivers -- a two-second slide -- in the "memoriam" segment. The Academy said there was not enough time.

The show ran over by about 20 minutes.

Streamers And Skyfall -- February 23, 2015

We haven't had a story on "streamers" in a long time.

Last time was about a year ago.

But we have an update today. A reader sent me this link to MailOnline reporting that at least 130 "streamers" were seen in "anticipation" of a huge solar farm going live.
More than 100 birds have been injured during testing of a new solar power farm.
Biologists say 130 birds caught fire mid-air while entering an area of concentrated solar energy created by the 110-megawatt Crescent Dunes Solar Energy Project near Tonopah, Nevada.
Experts believe the birds may have been attracted by the glow of the farm’s tower, but the project’s owners, SolarReserve, say they have found a way to reduce the fatalities.
In a test, one third of the project’s 10,000 mirrors were moved to focus sunlight at a point 1,200 feet above ground level – at approximately twice the height of its tower.
It took biologists just an hour and a half to notice the first of the ‘streamers’ – birds that catch fire and leave a trail of smoke in the air -when entering the field of solar energy.
"Streamers" -- or as the say in southern California: Kentucky Fried Chicken. Brings a whole new dimension to "roadkill."

The best line in that story: "... the project's owners say they have found a way to reduce the fatalities."

Yes, don't turn on the switch.

Skyfall.

Skyfall, Adele

Not Ready For Prime Time -- February 23, 2015; Apple Surges (Relatively Speaking) On A Down Day For The Market

A reader wrote me suggesting that he sees low oil prices for "several years" (as do other pundits).

This was my reply:
I agree with you, trying to predict oil prices is a fool's errand, as the WSJ or one of the print media outlets said recently.
Two data points that folks don't talk about much:
1. I don't know when we will see the low in the price of oil, but whatever it is and whenever it occurs, that's the "re-set" as Hillary would call it. Whether the low is $50 or $40 or $20, at some point oil will hit its low. I'm pretty convinced that the low of $20 or $40 or won't last for years; possibly $50, but I doubt it; even $60 for several years seems a stretch. But whatever the low is, that will be the new "low," the new re-set going forward. If the the low hits $20, and oil goes back to $40 in 2017, that's a doubling in price. I'm not looking for those numbers, but just suggesting how the "re-set" becomes quite interesting -- for investors.
2. Saudi Arabia needs $100-oil to balance their budget; they say they have huge cash reserves and they say they can go quite some time at much lower oil prices. Most OPEC countries need significantly more than $100 oil to balance their budgets (and, yes, I know their published data is subject to question and subject to hyperbole) but I doubt any of the OPEC countries are in as good a shape as Saudi Arabia. At some point something has to give. If we have $40 - $60 oil for "several years,"most of the Mideast, Russia, Venezuela, north Africa, and west Africa are in deep, deep trouble.
All the money being funneled to support such states as Palestine by Saudi Arabia will go by the wayside and Palestine will be an even bigger issue
So, for me: two things --
1. There is or will be a new re-set when valuing oil investments;
2. Several years of $40 - $60 oil will wreak havoc on countries I've mentioned above (right now the US market can barely handle Greece leaving the EU). 
I wrote that note a few days ago.  I posted this note today because of this comment: Several years of $40 - $60 oil will wreak havoc on countries I've mentioned above.

 So, why is that important. There are hints that "the countries listed above" are already feeling the impact. CNBC/Financial Times is reporting:
Members of Opec have discussed holding an emergency meeting if crude continues to slide, according to Nigeria's oil minister, in a sign of their growing alarm over the impact of a lower oil price on their economies.
The comments by Diezani Alison-Madueke come three months after the cartel's decision to hold production at 30m barrels a day, even as the oil price has plunged since mid-June. That move, driven by Saudi Arabia and its Gulf allies, marked a sharp deviation from Opec's traditional strategy of adjusting production to keep prices high.
The group's main objective is now to defend market share, despite dramatically reduced revenues. The price plunge has forced energy companies all over the world to rewrite their investment plans, and caused a major slowdown in the US shale oil industry.
But it has also thrown the fiscal balances of big oil producers such as Nigeria, Venezuela and Russia into disarray
Expanding on the original note.

Quick: name the terrorist groups "working" in west Africa. Al-Qaeda and Boko Haram. Quick: where is Boko Haram active? The Daily Signal is reporting:
Across the continent in West Africa, Boko Haram “maintained a high operational tempo in 2013 and carried out kidnappings, killings, bombings and attacks on civilian and military targets in northern Nigeria, resulting in numerous deaths, injuries and destruction of property in 2013.”
Two things the government won't have if it doesn't have oil money: a) money to fight the rebels; b) money to keep their citizens happy.

Russia has similar problems, particularly among the Muslims in former republics of the USSR and along Russia's borders.

But it's not just the oil-producing countries that are at risk of increasing social disarray. Some Muslim countries -- or quasi-countries -- depend on money from Saudi Arabia (and perhaps other oil-producing OPEC countries): think Arafatland. (See also this post of August 20, 2015.)

And that's the first problem: oil at $20 - $40 works in favor of the terrorists. When "they" talk about "disarray," that's code for a) civil unrest; and, b) terrorist events.

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Apple Hits A New High On A Down Day 

Yahoo!Finance noted that AAPL hit a new high. That's something of an understatement. Considering a "down day" on the market, and the downward trend apparently led by technology and oil, it's interesting that AAPL is surging, relatively speaking. I expected a move one way or the other, up or down, maybe to the tune of 50 cents, but here we are, with AAPL up over $3.00 and nearing $800 billion in market cap. And that's on NO news.

Unless this was the news. Macrumors is reporting:
Apple announced on Monday that it will invest €1.7 billion to build and operate two new data centers in Europe. The state-of-the-art facilities will be located in County Galway, Ireland and the Central Jutland Region of Denmark, powering Apple's online services such as the App Store, iTunes Store, iMessage, Maps and Siri for European customers.
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Snow Day Agenda

Our granddaughters had a "snow day" -- actually an "ice day" due to freezing rain last night and then a quarter-inch/half-inch of ice on roads today. They spent the day with us. This was the rough agenda for our older granddaughter:

Random Update Of An EOG Round Prairie Well -- February 23, 2015

The well:
  • 19927, 725, EOG, Short Prairie 8-1224H, Round Prairie, 2 sections, AL, t11/12; cum 163K 12/14;
[For newbies, the above is my shorthand (no one else uses it) -- well file number, the IP, current operator, legal name of the well, oil field name,  spacing unit is 2 sections [1280-acres], AL = artificial life [pump], the date the well was tested (after it was completed/fracked) and the cumulative production to date, 163,000 bbls as of December 31, 2014, the most recent data available.]

From the NDIC website (basic subscription required; easy to get; $50 annually; well worth it if one has mineral rights):

NDIC File No: 19927   
Well Type: OG     Well Status: A     Status Date: 11/5/2012     Wellbore type: Horizontal
Location: SWSE 12-154-104       Latitude: 48.170116     Longitude: -103.997924
Current Operator: EOG RESOURCES, INC.
Current Well Name: SHORT PRAIRIE 8-1224H
Total Depth: 20466     Field: ROUND PRAIRIE
Spud Date:  6/23/2012
 Completion Data
   Pool: BAKKEN     Perfs: 10716-20466     Comp: 11/5/2012     Status: AL     Date: 1/21/2013     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 162,746     Cum MCF Gas: 100835     Cum Water: 344407
Production Test Data
   IP Test Date: 11/6/2012     Pool: BAKKEN     IP Oil: 725     IP MCF: 456     IP Water: 4040


PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-201431504348366937372735720
BAKKEN11-201430344632586447260824660
BAKKEN10-201422196018615566136712600
BAKKEN9-201425407841965916341932970
BAKKEN8-20143163506556844948744565154
BAKKEN7-201431539250418382444942940
BAKKEN6-201430493256147777396138110
BAKKEN5-201431479148358836364434890
BAKKEN4-201430516848319115377136210
BAKKEN3-201431512548428536373035750
BAKKEN2-201428378640348504249923620
BAKKEN1-2014315242515410009342632710
BAKKEN12-201331391835569319263324800
BAKKEN11-201330331338018867164514970
BAKKEN10-2013314969462311146311129560
BAKKEN9-2013304591481610830312929810
BAKKEN8-2013315008508512169324130860
BAKKEN7-2013314934485512221309629430
BAKKEN6-2013304665441212063331931700
BAKKEN5-201331619867131554327302147433
BAKKEN4-2013307368718816578377136210
BAKKEN3-20133110075995120787820080480
BAKKEN2-2013269582939818537476146340
BAKKEN1-2013188663908517199570656200
BAKKEN12-201231188861920740858654918624532
BAKKEN11-201220152631411143816746907374

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Comments (disclaimer -- I have no background or formal training in the oil and gas industry; what follows is simply my opinion; many will disagree; no one should make any decisions based on these comments; it is simply idle chatter; if this information is important to you, you should visit more credible sources):

This was my original description of the Round Prairie oil field:
Round Prairie is about a 20-section oil field west of Williston, right on the Montana state line. It is all prairie. It looks like the field is owned by EOG. The wells are mediocre but they were probably completed before EOG started using newer completion techniques. They should all hit 100,000 bbls in three or four years (some already have); some might take a bit longer. But they should all pay for themselves, and are all good enough to ensure more drilling in this area.  With the exception of one well, they are all producing between 1,000 and 6,000 bbls/month.
That, of course, was written before the slump in oil prices. It appears the entire field is "held by production," so there won't be any hurry to initiate new drilling until prices recover -- and because this is not the best spot in the Bakken, one would not expect new drilling until oil prices are significantly higher (back in the $80-range, at least).  Again, remember this is simply opinion, idle chatter. I have nothing to base this on except my following the Bakken for several years.

A typical well in a mediocre field will probably produce around 400,000 bbls of oil over its 20 - 40-year-lifespan assuming oil prices support continued operation of the well.  The total production of a well is referred to as the estimated ultimate recovery (EUR).

The biggest expense for this well, now, is probably getting rid of the water. This well is producing more water than oil right now and all that water has to be trucked out and brought to a saltwater disposal well. 

The well is capturing all its natural gas; no natural gas is being flared. 

If the price of oil returns to the $100-range, a well like this one would probably be re-worked several times in its life-time. 

It's hard to say whether this well will be re-fracked. Its initial fracking was a pretty impressive 48 stages using almost 10 million pounds of sand. It was also a fairly deep well: the middle Bakken about 10,500 feet deep vertically. So, a relatively expensive well.

The biggest unknown is whether this well will be choked back due to the slump in oil prices and whether it will be shut in if the slump in the price of oil persists.


Pajama Day And Sledding Day -- North Dallas -- February 23, 2015


That's clear ice in the parking lot, I assume about a quarter-inch to a half-inch thick.