This is an interesting article about the monarch butterfly. Its decreasing numbers is very, very well known and was the subject of a Fargo, ND, story last year, in which the declining number of monarch butterflies was blamed on loss of forest in Mexican mountains and .... drum roll ... cooler winters in the US:
Local experts say colder winters in the US and illegal logging of
Mexico's forest are bringing drastic change to the Monarch population.
One year later, one of the two problems is resolved. There is no longer any shortage of Mexican forest. But the winters remain ... well, cold, though the folks in Washington can't bring themselves to acknowledge that, so it becomes the old stand-by, "We really don't know. Maybe it's pesticides." The StarTribune is reporting:
Scientists have cited a number of reasons for the decline. For a time,
logging in and around Mexico’s mountain forests deprived them of
critical winter protection, but that’s been largely stopped. Now their
numbers are so low that there’s room to spare in the mountains.
So, using simple elimination from last year's WDAY article out of Fargo, it's the cooler climate.
But, gosh, that doesn't fit the Bill Maher school of common sense, so it must be something else. Let's go with milkweed.
And let's plant lots of it, from Dallas to Detroit.
Whatever.
*********************************
Not A Pretty Picture
Not a good day for Phil Mickelson either (see graphic above -- yes, he is in the bottom five.
This was "game day" for our older granddaughter. Eleven years old, she plays for the "12 and under team" as a starter as well as a reserve on the "16 and under team" for the school that took the Texas state championship in water polo this year. She has a lot of years ahead of her; she won't be playing for a state championship for several years but at 11 years old, she's not doing too badly. Her "12 and under" team won one, lost one today, and she was on the winning team in the first "16 and under team" game. She had a lot of playing time in that game, but opted not to play in the second game. Three games altogether today; a busy day.
Number 22 in the "12 and under game":
********************************* The "Brown Ranch" In Slope County, North Dakota
There are so many reasons the internet has become important. One of the best uses of the internet has been for ordinary folks to capture their personal histories.
Some years ago I wanted to put down in writing my parents' history. It turned out that a "blog" was absolutely the best way to do it. The grandchildren and nephews have used the "blog" to learn about their grandparents. It has really worked out quite well.
Don sent me a great example of what I'm talking about. This is a fascinating story on so many levels. This is the story of the "Brown Ranch" in Slope County, North Dakota. Without the internet, these are the stories that would be lost. At best they would become a paragraph in a book on the Great Plains published by the Oklahoma University Press and bought by only a handful of folks. Hopefully, this story and others like it, will exist for all and will exist forever on the internet and not archived, and "lost."
The article is packed with details about ranching, and could easily serve as a jumping off point for a youngster interested in writing a paper on farming or ranching for a school project.
What a great story.
*******************************
Fine Art Museums
Another reader is sending me daily updates on his (and his wife's) trip to Europe, a cruise down the Moselle/Rhine, I guess, from somewhere in southern Germany/eastern France to the North Sea in the Netherlands, where they have been for the past couple of days.
A highlight of the cruise, of course, is visiting fine art museums, especially in the Netherlands.
Our family spent fourteen years overseas -- an unbroken fourteen years overseas -- most of it in western Europe, and much of it along the Moselle/Rhine, so the reader's daily e-mail notes have been quite enjoyable.
We learned to enjoy fine art museums when we were overseas and continue to enjoy them here in the states. Visiting fine art museums is now the #1 destination when I visit any large city.
It took several years, and dozens of visits, but I finally figured out how to enjoy a fine arts museum, especially with younger children.
As soon as we arrive at a fine arts museum, we check the daily "schedule" to see what the curator is highlighting that day. We then head, immediately, for the museum's cafe or restaurant. I now judge the quality of a fine arts museum on its quality of food offered; price is not generally an issue. (Museum restaurants and cafes are so much better and so much more reasonable than fare at Disneyland or MLB parks.)
We try to arrive when the museum first opens, and by going to the restaurant as the first top, usually by 11:00 a.m. we miss the noon crowd, and the kids (and I) are in a great mood to visit the museum. While having brunch, my wife and I check the museum brochure to plan our visit.
The most important mindset for visiting a museum is this: visit it with the expectation that you will see it several more times before you die. If you visit it with the mindset you will never see it again, you will attempt to "do" a five-day museum in six (6) hours, leaving you incredibly exhausted and having seen everything but not seeing anything.
Obviously, most of us will never see most of these museums more than once in our lifetime, but the mindset is not "wrong." I would rather see five or six really "neat" things in an art museum over the course of two or three hours, than walk by 1,476 things in six hours.
I sit a lot while visiting art museums. That may be one of the biggest failing of art museums. Not enough places to sit, relax, contemplate. In addition, the children (or grandchildren) in strollers can get out and crawl around. The elementary-age children (or grandchildren) can be given sketch pads and have them practice drawing what they see.
Mid-day, we head for the book store, to see what we might have missed in the museum, and then another cafe visit (or not) and back to see a specific piece or two.
We generally leave early, simply because we don't want to feel exhausted upon exiting. We want to savor the moment.
I have just finished Meryle Secrest's biography of Joseph Duveen, perhaps the most influential art dealer of all time. It was in that book that I learned the word "provenance," or the history of a particular piece of art, how it has been handed down / sold through the ages, and where it currently resides. I have yet to find any museum that provides a provenance alongside their pieces. Meryle Secrest taught me that this could be done with minimum of effort and minimum of ink. These little vignettes take up very little room; the curators know the story; and, the information would add immeasurably to the museum-goer's experience.
For example, this is the provenance of Thomas Gainsborough's The Blue Boy (1770), the second most important/famous painting in the world (the Mona Lisa being #1):
Jonathan Buttall; John Nesbitt, London; John Hoppner; Robert, 2nd Early
of Grosvenor, 1st Marquess of Westminster; Hugh, 2nd Duke of
Westminster; Duveen, 1921; Henry E. Huntington; The Huntington, San
Marino, CA (where it now resides).
In this particular case, one might even add a short paragraph or two about how Duveen finessed the purchase and the sale of The Blue Boy.
Note: in a long post like this, there will be more typographical and factual errors than usual. See full disclaimer elsewhere. This is simply the opinion of an individual with no formal training or background in the oil and gas industry. I post this mostly to help me understand the Bakken hoping that where I am confused or make mistakes, readers will enlighten me. As long as this post is, much was left out, much was not said.
This "case study" is not to sort out everything in the Bakken. It is to make one point: the drop in Bakken crude oil production is due to a lot more than just the active rig count and the backlog in fracking.
If this information is important to you, go to the source. I don't think there is anything in this post that could be construed as investment advice, but if you think you see it, don't make any investment or financial decisions based on what you read here. This is not an investment site. Yes, the USA Today article that is linked could be used as investment advice; that was not the purpose of linking it.
********************************
There is an interesting article in USA Today from OilPricesuggesting that all that talk about oil going to $20 or $30 isn't going to happen.
It begins:
Oil rising to $60 a barrel is displeasing some people, particularly the
shorts. Some of the more extreme -- those calling for oil in the $20's –
have wisely fallen silent. Others, like Goldman Sachs,
who a few months ago had set their flag in the 30's, have unfortunately
not gone so silent. They recently moved their flag into the 40's but
they continue to talk a lot. A better strategy – though one that would
require some humility — would be to stop talking and listen.
I've followed OilPrice for awhile now and this article continues their theme. I did not find much new in the article that hasn't been talked about in the blog.
However, for newbies and for me, the article is full of interesting data points. Interesting in the sense that the data points give me something to discuss.
By the way, before I go on, there is a new term introduced in this article: fracklog. This refers to the backlog in wells that need to be fracked.
This caught my eye:
The IP (initial production) rates right after a completion may be high
with shale wells, but there is a very steep precipice that immediately
follows. As we move through time, more and more wells are slipping down
this curve that bottoms out at 15% to 20% +/-of initial production
rates. And this only takes a handful of months. The flat section a year
or so out is known as the tail. The tail is good money, but the upfront
flush is what pays for wells.
Ever since the beginning of the Bakken, observers have talked about the "steep decline." OilPrice brings it up again. But there's a slight twist.
Everyone agrees the drilling rigs are coming down in unconventional/tight/shale oil, and everyone agrees that there has always been a steep decline after the initial period of production, say six months or so.
However, there is a new wrinkle. Last night I started updating all the "drilled-but-not-completed" wells reported in the first quarter of 2015. I only completed a few before I noted something very interesting. I had noted this some months ago, but never blogged about it, but now it's becoming so obvious, I thought it time to write about. [And, also due to the fact there isn't much else to write about today.]
Look at the production profiles of just four of the wells I updated last night (see below). These wells came off the confidential list in 1Q15 and all went to DRL status (by the way, most wells that would have gone to DRL status in the past are now going to SI/NC status, something noted late in 1Q15 and now throughout 2Q15.
I don't like using production profiles from Continental Resources. That company seems to manage individual well production a lot differently than the others in the Bakken based on the limited data I get from production profiles. But I can't be choosy. So, here are the production profiles from two Oasis wells, one XTO well, and one CLR well. As you look at these profiles, remember the typical production profile of a Bakken well one year ago:
first month: ignore; the well may have been fracked at the beginning, middle, or end of the month
second month: best month to get an investor excited
third month: holds steady, maybe more than the second month
fourth month: holds steady; this is where the break comes; some really great wells hold up; some start to fall; in the "old day," most began to fall by the fourth month; as the Bakken matured, wells were holding up better through the fifth month
fifth month: most Bakken wells now show the typical decline, though the good wells will continue to hold up pretty well
sixth month: that's it; time to move on; we've seen the potential of that well, and from here on it, it's a steady decline, albeit very slow in some cases, and work-overs, pump installations, operational considerations will take the wells off-line periodically.
28396, 754, XTO, Ernest Federal 31X-19G, Haystack Butte, t2/15; cum 16K 4/15:
Pool
Date
Days
BBLS Oil
Runs
BBLS Water
MCF Prod
MCF Sold
Vent/Flare
BAKKEN
4-2015
20
4857
4046
6955
7054
5887
1061
BAKKEN
3-2015
10
8514
8514
13216
10642
965
9677
BAKKEN
2-2015
3
1835
2535
9580
2157
0
2157
BAKKEN
1-2015
2
720
0
3335
1393
0
1393
28626, A, CLR, Rennerfeldt 4-30H, Brooklyn, 38 stages, 4.3 million lbs, fracked 2/15; no test date; cum 2K 4/15:
Pool
Date
Days
BBLS Oil
Runs
BBLS Water
MCF Prod
MCF Sold
Vent/Flare
BAKKEN
4-2015
2
635
264
492
923
887
36
BAKKEN
3-2015
10
1536
1458
17144
3258
0
3258
BAKKEN
2-2015
0
0
0
0
0
0
0
27224, IA/95, Oasis, Mallard 5692 31-22 11T2, Alger, Three Forks, 2nd bench, in July, 2014, 12 stages, 1.8 million lbs; in October, 2014, 24 stages, 3.1 million lbs; t10/14; cum 3K 4/15; on-line for 20 days over 10 months; last produced in November, 2014:
Pool
Date
Days
BBLS Oil
Runs
BBLS Water
MCF Prod
MCF Sold
Vent/Flare
BAKKEN
4-2015
0
0
0
0
0
0
0
BAKKEN
3-2015
0
0
0
0
0
0
0
BAKKEN
2-2015
0
0
0
0
0
0
0
BAKKEN
1-2015
0
0
0
0
0
0
0
BAKKEN
12-2014
0
0
37
0
0
0
0
BAKKEN
11-2014
5
957
958
4928
2042
2042
0
BAKKEN
10-2014
6
872
834
10629
1626
1626
0
BAKKEN
9-2014
0
0
32
0
0
0
0
BAKKEN
8-2014
9
1234
1202
16543
998
998
0
BAKKEN
7-2014
0
0
0
0
0
0
0
Commentary
The broad brush:
first month: ignore
second month: best data we now have to estimate the well's potential
third month: all bets are off
All bets are off by the third month for three reasons:
operators are cutting back production because prices are low; it's better to store oil underground than above ground
NDIC flaring rules; severe penalties if operators continue to flare
NDIC conditioning rules: going forward, less of an issue, but still needs to be considered
Even if prices were sky-high, the Bakken would not reach maximum production because of NDIC flaring rules. The conditioning rules, it turns out, won't have much effect.
Now, the fine brush look, but still a superficial look, at the four wells highlighted above.
Fine brush, the Oasis Chalmers well:
remember, ignore the first month
only 25 days 2nd and 3rd month; normally Bakken wells produce the full 30 and 31 days the first two months
then
the huge drop off in months 4 and 5: we never used to see that; in this
case Oasis dropped to 3 days in the fifth month; for all practical
purposes, the well has been shut in; there may be operational reasons
but the outcome is the same
Fine brush, the XTO Ernest Federal well:
ignore the first month
look at that second month; should have been up for the full 28 days
third
and fourth month: coming along, but still well below full month
production; and the wells continue to flare (not good news)
Fine brush, the CLR Rennerfeldt well:
ignore the first month
ignore the entire production profile; it makes no sense which is not unusual to see in CLR pad drilling
Fine brush, the Oasis Mallard well:
this
is a Three Forks 2nd bench well well; we have seen too few 2nd bench
wells to know how this payzone will work out
the IP was atrocious, but
over a 9-day period, it looked promising
after that, who knows, but whatever it is, this is not a typical Bakken decline curve; no Bakken wells drop to 0 bbls by the third or fourth month, no matter how bad they are
This is the bottom line: with regard to decline curves, before January,
2015, observers could actually see the typical Bakken decline curves; and the
operators could provide nice schematics of the decline curve for any
given well. Not only that, but the operators were improving on the decline
curve, and the quasi-canard that Bakken wells had a serious decline issue was
becoming more and more a cliche as operators improved on the decline
curve.
The mainstream press talks about decreasing
production in the Bakken due to fewer active rigs and the steep decline
rate of Bakken wells.
The data point I am most looking forward to in the next Director's Cut ... the number of wells waiting to be fracked. In last month's report, upwards of 900 wells were waiting to be fracked. Based on what I'm seeing so far, it's hard to believe that the number has dropped; if it goes over the 1,000 mark, one can expect a lot of headlines.
On the other hand, I'm going through the "new wells reporting" for 1Q15 and updating the wells on DRL status; it is quite amazing -- it appears 9/10 wells on DRL status in 1Q15 have now been fracked and are producing.
