Thursday, April 23, 2015

Odds And Ends -- April 23, 2015

I'm driving from Texas to North Dakota; left about 10:00 p.m. last night -- wanted to experience the thunderstorms and earthquakes at night in Oklahoma. The thunderstorms were not particularly spectacular but would have put cattle into a stampede in the old days. I missed a 4.0 earthquake near Medford, Oklahoma by about 12 hours. I think, at 4.0, that is one of the stronger quakes; people felt it but "no" damage. We'll see.

I'm in North Platte, Nebraska, right now.  Will be here about an hour; then press on. I will sleep along the road somewhere -- Chadron, Black Hills, Belfield, Bowman, and on to Williston. 

WTI settled at $57.56 -- this is the highest since December, 2014.

NASDAQ closed at an all-time high. Dow closed higher.

Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here.


Link here

The Hillary story:
  • her foundation took millions of dollars in donations from a Russian company
  • her foundation never declared those donations
  • her foundation is now re-filing those tax returns to return those donations
  • the Russian company now owns 20% of all known uranium in the US
  • Putin: his goal -- to control the uranium market (Kazakhstan was the real target; got US rights as part of the deal)
NPR interviewed one of The NYT reporters who verified the story. NPR's initial take on the story:
  • there's nothing to see here, folks; move on
  • not even interested in "failure to report; refiling"
Amazon Stuns Wall Street With Profits

Yahoo!Finance is reporting:
Jeff Bezos decided after nine years it was finally time to disclose the financial results of his pioneering cloud business, Amazon Web Services.
And so, along with its first quarter results, Amazon disclosed that the AWS unit had revenue of $1.6 billion, up 50% from last year, and operating income of $265 million, up a more modest 8% amid growing competition from Microsoft, Google and others. 
After Hour Reports

Amazon, Microsoft, Google. Google surges after hours. 

Southwestern Energy meets.

Good report for Starbucks; strong in after-hours trade.

Comcast will drop Time Warner deal. Once Congress got involved, it was predictable.

Apple Page

Apple watch orders, shipments, apps going wild. There may not be big lines at the stores for the Apple Watch but the media is going wild with reports.  Australian customers to get first watches delivered to homes.
Trip Notes
My note to Don:
I'm in North Platte; will be here about an hour. Then press on.
Great ride so far. Beautiful weather; beautiful country, but very, very dry in western Nebraska. Much worse the DFW area. Cattle and horses were in knee-high grass in DFW area. Almost no grass in western Nebraska in many places where cattle are seen.
Lots of hawks above the freeway.
If cougars are found along the North Platte river, I saw a cougar. It was a huge cat, not a dog. In the vicinity of a small herd of deer. Yes, google search -- cougars in the area.

Active Rigs Down To 86 -- April 23, 2015; MRO With Three (3) Initial High Production Wells

Note: be sure to check out the update regarding the previous post ( 

Active rigs:

Active Rigs86187188212175

Eighteen (18) new permits --
  • Operators: Oasis (10), Enerplus (6), MRO, Ballard
  • Fields: Camp (McKenzie), Moccasin Creek (Dunn), McGregory Buttes (Dunn), Van Hook (Mountrail), Chatfield (Bottineau)
Permit cancellations --
  • HRC (3) -- Fort Berthold permits in Dunn County
  • Statoil (3) -- Jay permits in McKenzie County
  • Newfield (1) -- a Johnsrud well in McKenzie County
  • EOG (1) -- a Parshall well in Mountrail County
Five (5) producing wells completed:
  • 28708, 1,244, MRO, Brink 24-20TFH, Bailey, t3/15; cum --
  • 28704, 1,702, MRO, Greider 34-20TFH, Bailey, t3/15 cum --
  • 28705, 2,396, MRO, Castner 34-20H, Bailey, t2/15; cum 21K 2/15;
  • 27941, 513, Hess, GN-Cambrian-159-98-2536H-2, Big Stone, t4/15; cum --
  • 27869, 476, CLR, Skar 3-28H, Stoneview, 4 sections, t3/15; cum 2K 2/15;
Dry hole --
  • 27215, dry, Oasis, Chalmers 5301 44-24 3B, 
Wells coming off confidential list Friday:
  • 3440 (no typo), loc/30, Enduro, NSCU K-709, Newburg, a Spearfish/Charles, cumulative to date -- 337K as of 4/2008; this is a "secondary recovery injection application for a permit to "convert said well to an enhanced recovery well... injection shall be through tubing and packer with a packet set within 100 feet of the top perforation
  • 5173 (no typo), loc/INA, Enduro, NSCU J-706, same as #3440 above;
  • 27526, 1,004, Newfield, Sand Creek State 153-96-16-4H, Sand Creek, t1/15; cum 18K 2/15;
  • 28163, 94, OXY USA, Federal Bud 3-29-32H-143-96, Fayette, t11/14 cum 26K 2/15;
  • 28338, 228, American Eagle, Huffman 15-34S-164-102, Skjermo, t12/14; cum 24K 2/15;
  • 28789, drl, CLR, Melgaard 3-23H, Sadler, no production data,
  • 29046, 1,303, Hess, BB-Belquist-150-95-1110H-11, Blue Buttes, t4/15; cum --
  • 29112, drl, Hess, EN-Uran A-154-93-2215H-9, Robinson Lake, no production data,
  • 29542, 112, Enduro, NSCU R-709-H1, Newburg, a Spearfish/Charles, t12/14; cum 5K 2/15;
  • 29568, drl, SHD, Wiley 24-30H, Deep Water Creek Bay, no production data,
Ten More Oasis Wells In Section 30-152-100

The wells in the far northeast corner of section 25-152-101 are the Oasis Andersmadson wells.

Other wells in section 30-152-100 above:
  • 24287, 3,247, Oasis, Morrison 5200 11-30T, 36 stages, 3.8 million lbs sand/ceramic, t4/13; cum 102K 2/15;
  • 24288, 4,489, Oasis, Sully 5200 11-30B, 36 stages; 3.7 million lbs sand, t4/13; cum 142K 2/15;
  • 22399, 3,330, Oasis, Lefty 5200 13-30H, t7/12; cum 216K 2/15;
  • 26124, 1,041, Oasis, Lefty 5200 14-30 2T, 36 stages; 3.8 million lbs sand/ceramic, t4/14; cum 62K 2/15;
  • 26833, 1,613, Oasis, Hysted 5200 14-30 3T2 (TF second bench), within target interval 96%, t4/14; cum 25K 2/15;

A Reader Asked About A Hess Well In Hawkeye -- April 23, 2015


November 3, 2015: the well is back to a steady, typical decline and/or slightly choked back production profile. The February, 2015, production (almost nothing) was probably due to work on the well / pad. Now, all back to normal. 

July 6, 2015: a reader provided this comment over at the Discussion Group --
The well file shows pump problems last year that was fixed, but nothing this year. Production has been pretty consistent month to month for over 2 years.  The low month in February is more likely the well being choked back to produce less due to the extreme low oil prices at that time.
See comment below. The comment about the well being choked back in February makes sense. That "ending" date of 3/07/2015 does sound suspect, as another reader originally noted. It's the exact same date as the start date (month/day) except for the year (2012 vs 2015). I bet the original reader was correct; that "2015" date was a typo and should have been "2012." 

The company said the frack data would be provided later; there is still no frack data at the NDIC file for this well.

Later, 6:57 p.m. CT: this is really, really interesting. See first comment. I brought it up here so it is easier to google:
The site shows two fracs, one starting 3/2/2012? ending 1/19/2015 and an earlier frac starting 3/07/2012 ending 3/07/2015. (the dates seem suspect)

33-053-03585-00-00 3/2/2012 1/19/2015 North Dakota McKenzie
Hess Corporation

HA-Dahl-152-95-0706H 2
47.992620 -102.887414 NAD27
33-053-03585-00-00 3/7/2012 3/7/2012 North Dakota McKenzie
Hess Corporation

HA-Dahl 152-95-0706H-2
47.990000 -102.000000 NAD83
That makes sense: they did an open hole frac when the well was completed in 2012; then in 2015, a few months ago, they went back in and re-fracked it. It will be interesting to see what kind of re-frack they did. At least that's how I would interrupt it until I get more data.

Production updates will be placed in the original post below to make it easier to follow; the narrative will remain unchanged for archival purposes.


Note: this entire page was done quickly and not checked for errors. There will by typographical and factual errors. If this information is important to you, go to the source.

A reader asked about #20755 when it was noted there was "a huge jump in production between February and March 2015" according to the reader.
  • 20755, 381, Hess, HA-Dahl-152-95-0706H-2, Hawkeye, t3/12; cum 247K 2/15;
From the geologist's report:
"... the Three Forks & Target Zone was first seen at the end of the curve build, encountered at a measured depth of 10,890' (10,556" TVD). The Three Forks formation is directly below the Lower Bakken unconformity, with the lowermost Pronghorn Member of the Bakken absent here. ... the lateral was drilled in 220 hours.... the lateral portion of hte well was drilled with a total of 60% in the specified target zone and 100% in the Three Forks formation in a time frame of 30 days....background gas reached a pinacle at 6,611 units with average...400-2,200 units."
I don't have the production data for March, 2015. From the well file:

The most recent forms in the well file had to do with a pump a year ago: Work on the well was completed March 22, 2014, and the sundry form was received by the NDIC on April 9, 2014.

From the report a year ago: MIRU for stuck pump; resolved (either repaired or replaced; I don't understand the jargon in the paragraph; probably repaired).

This is what the production profile looked like around that time, a year ago:


 The most recent production at the NDIC site:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

... and there is no production data for March, 2015, at this site, and no sundry form yet scanned in by the NDIC that might explain an increase in production in March, 2015.

I did not see the frack data at the NDIC well file, but obviously the well was fracked in early 2012 based on this initial productio profile (unless I'm wrong and this well was never fracked, it's a humdinger of a naturally-fracked area):


A pump was placed in September, 2012.

This well is on a 2-well pad; the earlier well:
  • 16825, 307, Hess,  HA-Dahl-152-95-0706H-1, Hawkeye, middle Bakken, vertical well in 10 days; lateral in about 12 days, OH stim with 300,000 lbs and 17K bbls Slickwater; t1/08; cum 244K 4/15;
From the geologist's report:
... this well was drilled entirely within the Middle Bakken... gas appeared to be higher than indications at possum belly or flare at times throughout the well...
Note the production profile most recently, January - February, 2015 (both with about the same number of days on-line):

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
Amazingly, this was an open-hole stimulation/frack with 16,636 bbls of Slickwater and 298,808 lbs of Ottawa Sand.

Early production profile of #16825:


There was a typical Bakken decline until June, 2010:


There is a sundry form received by NDIC in July, 2010, suggesting a work-over that started about July 30, 2010. 

So there you have it.

It will be interesting if readers:
  • have production numbers for these wells for March, 2015
  • have information about the wells between February, 2015, and March, 2015.

This Is Not News To Regular Readers -- April 23, 2015

Bloomberg is reporting:
Drillers in oil and gas fields from Texas to Pennsylvania have yet to turn on the spigots at 4,731 wells they’ve drilled, keeping 322,000 barrels a day underground, a Bloomberg Intelligence analysis shows. That’s almost as much as OPEC member Libya has been pumping this year
The number of wells waiting to be hydraulically fractured, known as the fracklog, has tripled in the past year as companies delay work in order to avoid pumping more oil while prices are low. It’s kept crude off the market with storage tanks the fullest since 1930. The fracklog may slow a recovery as firms quickly finish wells at the first sign of higher prices.
300,000 bbls. That's per day.

Blogging To Be Delayed Next Few Days -- April 23, 2015; Why Yemen Matters; New Home Sales Plummet As Sales Tumble In Northeast, South

I am driving from Texas to North Dakota over the next few days. My blogging will be delayed. I replay to all e-mail but those replies will now be delayed.

I depend on readers to provide links to Bakken news. Keep sending the links but you may not see them posted for a few days, but I will eventually get caught up.

NG Fill Rate

Link here: 90.

"Energy Cookie"

Today's EIA "energy cookie":
Trade in crude oil and petroleum products transiting the Bab el-Mandeb has increased steadily in recent years, growing from 2.7 million barrels per day (bbl/d) in 2010 to almost 4.7 million bbl/d in 2014. From 2013 to 2014, trade grew by more than 20%, with an increase of more than 200,000 bbl/d in crude oil exports from Iraq to Europe contributing to higher northbound traffic. --- EIA

Say What About 1Q15 Earnings?

Caterpillar's earnings soared more than 20 percent in the first quarter, even though revenue slipped, and the construction and mining equipment maker hiked its 2015 earnings forecast well above most expectations.
The company's profit for the quarter that ended March 31 included a pre-tax gain of $120 million from the sale of its remaining interest in a logistics business. The company also saw a nearly 6 percent drop in operating costs, to $11.18 billion.
Overall, Caterpillar Inc. earned $1.11 billion, or $1.81 per share, in the first quarter. That compares with $922 million, or $1.44 per share, last year.

New Home Sales Plummet

US new-home sales slump 11.4 percent in March as sales tumble in Northeast and South.

Active Rigs Down To 87 -- April 24, 2015; Jobless Claims Have Risen For Three Straight Weeks But Labor Market "Solidly Improving" -- Reuters, Bloomberg

Jobless claims: forecast - 287,000. Actual, surges to 295,000 -- but that's only an increase of 1,000 from previous week. So, if I got the math right, it went from 294K to 295K, but the analysts forecast 287K, a decrease of 7,000. In fact, initial claims increased a bit.

And the spin over at Bloomberg was in the first paragraph:Applications for U.S. unemployment benefits held below 300,000 for the seventh straight week, pointing to a rebound in payrolls after hiring eased last month. 
And now we're starting to see the four-week average also rise, up to 284,500 from 282,750 the week prior.

Reuters had the same spinThe number of Americans filing new claims for jobless benefits rose last week for a third straight week, but the underlying trend continued to point to a solidly improving labor market.


Active rigs:

Active Rigs87187188212175

RBN Energy: The End of the Displacement – Are Net Natural Gas Inflows into the U.S. Northeast History?
The U.S. Northeast natural gas market thus far has been able to offset local production growth primarily by pushing out supply from other regions.  But recent trends in pipeline flows suggest that for the first time, net flows into the Northeast will fall to zero this summer, marking the end of displacement. Meanwhile, regional natural gas production could be as much as 4 Bcf/d higher this summer than last. The result could put this summer’s prices in a precarious position further challenging producers suffering in an oversupplied market. . Today’s blog looks at recent trends in Northeast flows and implications for prices this summer.
The Northeast traditionally has sourced gas via pipelines from three adjoining regions: Southeast/Gulf Coast, Midwest and Canada. 
Back in 2009, before Marcellus production emerged as a supply source, there was almost no local production in the Northeast and inbound flows from these regions served nearly 80% of Northeast demand. 
As Marcellus production grew, pipelines took on backhauls, with Northeast receipts displacing flows from traditional sources of supply in Texas, Oklahoma and Louisiana.  The pipelines bringing this gas to the Northeast either began to run empty or, when possible in the case of bidirectional pipelines, began flowing some supply in the other direction. In fact, since new pipeline capacity can take years to build, the only way Marcellus gas production could have expanded as fast as it has and remain economically viable, was by displacing existing inflows
This local demand buffer has provided some breathing space for midstream players to develop pipeline projects to facilitate outbound exports from the Northeast. However, local Marcellus/Utica production has been increasingly outstripping demand  before enough of those projects can come online to transport surplus supplies to other market centers.
Targa Increases Dividend

From a press release:
Targa Resources Corp. announced today that its board of directors has declared a quarterly cash dividend of 83.00c per common share, or $3.32 on an annualized basis, for the first quarter 2015. The approved dividend represents increases of approximately 7% over the previous quarter's dividend and 28% over the dividend for the first quarter 2014.
This cash dividend will be paid May 18, 2015 on all outstanding common shares to holders of record as of the close of business on May 4, 2015.
Targa Resources Partners LP announced today that the board of directors of its general partner has declared a quarterly cash distribution of 82.00c per common unit, or $3.28 on an annualized basis, for the first quarter 2015.
The approved distribution represents increases of approximately 1.2% over the previous quarter's distribution and 7.5% over the distribution for the first quarter 2014. This cash distribution will be paid May 15, 2015 on all outstanding common units to holders of record as of the close of business on May 4, 2015. "We completed our mergers with Atlas during the first quarter, and are very pleased with the asset.