Sunday, June 14, 2015

Some Big Wells Coming Off The Confidential List Over The Weekend, Monday; Twenty-One Wells Coming Off Confidential List -- June 14, 2015

NOTE: in the examples below when I say these wells are being choked way back, I am probably wrong -- I think these wells were taken off-line due to neighboring wells being fracked; a fact with pad drilling. 

Monday, June 15, 2015
  • 28441, 1,032, Liberty Resources, Gohrick 158-95-17-9-5MBH, McGregor, 50 stages, 4.2 million lbs, t12/14; cum 56K 4/15; choked way back or take off line for operational reasons (neighboring wells being fracked)
  • 28442, 1,067, Liberty Resources, Gohrick 158-95-17-8-6TFH, McGregor, t1/15; cum 22K 4/15; choked way back or take off line for operational reasons (neighboring wells being fracked)
  • 28492, 4,371, Whiting, Tarpon Federal 24-20-1H, Sand Creek, t12/14; cum 113K 4/15;
  • 28493, 3,444, Whiting, Tarpon Federal 24-20-1RTF, Sand Creek, t12/14; cum 85K 4/15;
  • 28494, 3,125, Whiting, Tarpon Federal 24-20-2RTF, Sand Creek, t12/14; cum 56K 4/15; choked way back or take off line for operational reasons (neighboring wells being fracked)
  • 28734, 1,588, Liberty Resources, Gohrick 158-95-17-8-6MBH, McGregor, t2/15 cum 28K 4/15; choked way back
  • 28845, 796, Oasis, Langved 5393 43-10 11T3, Sanish, t4/15; cum 1K 4/15;
  • 29732, drl/NC, XTO, Eckert 41X-6C, Indian Hill, no production data,
  • 29928, Si/NC, Statoil, Paulson 36-1 5TFH, Briar Creek, no production data,
  • 29930, 347, Hess, BW-Arnegard State-151-100-3625H-8, Sandrocks, t5/15; cum 2K 4/15;
  • 30067, conf, SM Energy, Helen 1B-26HN, West Ambrose, no production data,
Sunday, June 14, 2015
  • 28049, 1,069, Hess, BL-Iverson-155-95-1819H-6, Beaver Lodge, t4/15; cum 29K 4/15;
  • 28863, 579, Hess, EN-Hermanson-LE-155-93-3501H-5, Robinson Lake, t5/15; cum --
  • 29461, SI/NC, BR, Remingteton 8-8-10MBH ULW, Blue Buttes, no production data,
Saturday, June 13, 2015
  • 23518, 1,453, Newfield, Johnson 150-99-34-27-3H, South Tobacco Garden, t3/15; cum 29K 4/15;
  • 26452, A, CLR, Jamestown Federal 4-17H1, Banks, t4/15; Three Forks B1, 30 stages, 4.2 million lbs;
  • 29427, SI/NC, BR, Teton 2-8-10MBH, Camel Butte, no production data,
  • 29734, drl/NC, XTO, Eckert 41X-6D, Indian Hill, no production data,
  • 29852, SI/NC, WPX, Beaks 36-35HC, Mandaree, no production data,
  • 30068, SI/NC, SM Energy, Helen 1B-26HN, West Ambrose, no production data,
  • 30130, SI/NC, EOG, Fertile 62-0410H, Parshall, no production data,

23518, 1,453, Newfield, Johnson 150-99-34-27-3H, South Tobacco Garden, t3/15; cum 29K 4/15;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28049, 4/15, Hess, BL-Iverson-155-95-1819H-6, Beaver Lodge, t4/15; cum 29K 4/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28493, 3,444, Whiting, Tarpon Federal 24-20-1RTF, Sand Creek, t12/14; cum 85K 4/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28494, 3,125, Whiting, Tarpon Federal 24-20-2RTF, Sand Creek, t12/14; cum 56K 4/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28734, 1,588, Liberty Resources, Gohrick 158-95-17-8-6MBH, McGregor, t2/15; cum 28K, choked way back or take off line for operational reasons (neighboring wells being fracked)

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28492, 4,371, Whiting, Tarpon Federal 24-20-1H, Sand Creek, t12/14; cum 113K 4/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28442, 1,067, Liberty Resources, Gohrick 158-95-17-8-6TFH, McGregor, t1/15; cum 22K 4/15; choked way back or take off line for operational reasons (neighboring wells being fracked)

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

28441, 1,032, Liberty Resources, Gohrick 158-95-17-9-5MBH, McGregor, t12/14; cum 56K 4/15; choked way back or take off line for operational reasons (neighboring wells being fracked)

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Another First For The Blog -- Absolutely Nothing About The Bakken

I don't think I have ever done this before, posted a YouTube video because of one of the comments. Here's the comment:
Wonderful, sure takes me back. Life was easier. We did not have to worry all the time about an evil world -- except for the Soviet Union.
We had fun. We rode our bikes all over the neighborhood and could stay out at night til the street lights came on. 
We respected our parents and the rules at school for the most part. Families were important. Not much TV but we did not just sit and watch. We did things and we listened to music like this all the time and knew the words. I am so grateful to have been brought up in this era of the 50s and 60s. My kids were born around 1980 but they were brought up with this music and I also liked a lot of their era's music.
It is a very different world today. The USA was strong and stood up as a nation for freedom. I know I digress! :) At any rate this music was so special and still is.
Here's the video:

Lost In The Fifties Tonight, Ronnie Milsap

A Note to the Granddaughters

I don't think I have ever come across a comment that so encapsulated the years I grew up on 17th Street in Williston, North Dakota. Her entire comment (above) hit every chord but perhaps the best:
We rode our bikes all over the neighborhood and could stay out at night til the street lights came on.  
My close friend and I rode our bicycles, not only all over the neighborhood, but all over Williston. My mother never yelled for us to come in. She turned on the porch light as the signal that it was time to come in. And in Williston, we could not see a lit porch light until after 11:00 p.m. Williston was in the northern latitudes but more importantly it was right on the western-most edge of the central time zone. So, at 11:00 p.m it was still as light as if it were 10:00 p.m.

If that makes sense.

The summers were the best, of course. They say it gets cold in North Dakota in the winters. I hardly remember. I was born in Bismarck, moved to Williston when I was two years old, and graduated from Williston High School. About eighteen winters in North Dakota and for some reason I don't remember the cold. I remember the wonderful summer evenings though.

If that makes sense.

The granddaughters are growing up with the music of the 50's and the 60's. We drive back and forth to a lot of soccer games and water polo matches. Every summer, a cross-country trip to southern California. It's kind of funny, now that I write that -- that may be the high point of my life now, every year, a trip back to southern California. I did not visit Los Angeles until I was in college but it seems California and I have crossed paths more than I would have ever imagined forty years ago.

Lost in the 50's tonight.


The New York Times is reporting from Waxahachie, Texas:
WAXAHACHIE, Tex. — Most Americans suffered serious losses during and after the recession, knocked off balance by layoffs, stagnant pay and the collapse of home values. But apart from the superrich, one group’s fortunes appears to have held remarkably steady: seniors.
Supported by income from Social Security, pensions and investments, as well as an increasing number of paychecks from delaying retirement, older people not only weathered the economic downturn that began in 2007 but made significant gains, a New York Times analysis of government data has found.
As a result, America’s middle class is graying.
People on the leading edge of the baby boom and those born during World War II — the 25 million Americans now between the ages of 65 and 74 — have emerged as particularly well positioned in the nation’s economic timeline. While there are plenty of individual exceptions, as a group they are better off financially than past generations and may well enjoy a more successful old age than future ones, even those merely a decade younger.
“These are people who have been blessed with good economic circumstances, especially those who were able to ride the wave of postwar economic growth,” said Gary V. Engelhardt, an economist at Syracuse. “They’re definitely in a sweet spot.”
Waxahachie is 45 miles due south of us. 

Later in the article:
“It’s not so much that older people are experiencing unseemly gains in income,” said Alicia H. Munnell, director of the Center for Retirement Research at Boston College. “It’s more that middle-aged people are not seeing income growing or even keeping pace with inflation.”
Middle-aged people are often still paying off mortgages just as the older children are starting college. 

The seniors between the ages of 65 and 74 are in the sweet spot: mortgages and college expenses should be things of the past, and if fortunate enough to be in good health, not yet having the expenses of assisted living and increased medical expenses. There's a 10-year-sweet spot for many from what I can tell for those baby boomers born in the late 50's.

A Long Rambling Note On A Bunch Of Things Regarding The Bakken -- June 14, 2015


June 18, 2015: in the original post, I referenced "the USGS survey" but did not go into specifics, or even have the correct date. Here's a 30-second soundbite:
The state slogan for Montana is “Big Sky Country.” Stretching across Montana, North Dakota and South Dakota, and even the Canadian provinces of Saskatchewan and Manitoba in the Williston basin, the Bakken/Three Forks play is truly a Big Sky resource.
In its 2013 assessment, the U.S. Geological Survey (USGS) estimated mean undiscovered volumes of 7.4 Bbbl of oil, 6.7 Tcf of associated/dissolved natural gas, and 0.53 Bbbl of NGLs in the U.S. portion of the Bakken and Three Forks formations.
Operators are able to target multiple stacked formations in these formations. The total shale can be as thick as 375 ft.
Original Post
NOTE: The Williston Herald reports that the Director's Cut will be released Friday, June 19, 2015. Link here:

If it is not released until Friday, that will be the first time that I can recall in a long time that the Director's Cut was released that late in the month.

Note: on a long note like this, there will be factual and typographical errors; there will be opinions interspersed with facts. Where I seem to be a bit inappropriately exuberant, don't confuse me with facts. LOL.  This is my world view of the Bakken, at least for the moment.

On June 10, 2015, I posted this bullet without a stand-alone post (there was just too much going on):
I assume most readers were aware of the story but for those who may have missed it, this is from the linked article:
NEW YORK (Reuters) - Oil traders scrambling to secure crude in the U.S. Midwest have pushed North Dakota's Bakken to a near premium for the first time in two years, a rally stoked by record refinery runs and an unprecedented slump in Canadian imports.
Yet some traders say the surprising strength emerging from opaque physical crude markets in the heartland of the fracking boom also points to a more important, lasting factor: declining production of Bakken crude, a long-anticipated but as yet unproven twist in the shale revolution.
I am posting this again, because it is so important, and has so many story lines, but also because Don sent me this link from an investment discussion board:
I think we have all penciled in the idea that Bakken crude trades at a $10 discount to WTI. But it looks to me like new pipelines & refineries are chipping into the discount, and that in 2 years that pipelines will be competing to transport Bakken crude.

The first interesting item is that midwest refineries have retooled (sensibly) to process Bakken crude. The Enbridge North Dakota Pipeline charges $1.50-$2/bbl to transport into Minnesota. Minnesota is now trading less than a dollar below WTI. So for producers lucky enough to get on that pipeline (220kbpd - about 1/5th of N.D. production), they're getting spreads below $3 today, vs $10 in investor's minds.

In addition, more pipelines are going in, and by the end of 2016, it looks like pipeline+refinery capacity ~ 1.2mmbd, which is about what the Bakken produces now. With rails, they're going to have twice as much capacity as actual production.

These pipelines will essentially hook Bakken crude to midwest, Canadian (blended with their heavy) and east coast refineries. I think the reliability and cheapness of pipelines is going to mean several areas are going to use bakken crudes instead of imported ones (this is already happening).

Overall I see the $10 spreads from last quarter moving downward through 2015 and maybe reaching $5 next year. That's a pretty nice tailwind, equivalent to WTI going up 10% or so from the perspective of the Bakken players.
 There are so many story lines here.

Most important: the RBN posts are "live" for a short period of time. They are archived shortly after being posted and are then available only by subscription. The RBN post linked above is still available without a subscription.

Almost as important: 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. However, understanding / knowing the "spread" between Bakken and WTI will be helpful in understanding the Bakken.

On another note, the phrase in the Reuters article about "declining Bakken production" probably suggests many things to many folks. Some data points for newbies:
  • the most recent USGS survey, back in 2010, or whenever it was, was based on data from the middle Bakken and to some extent, what was known about the upper Three Forks at that time (I have forgotten the specifics) -- if it's important to you, go to the source
  • the most recent USGS survey, back in 2010, or whenever it was, did not factor in the two or three lower benches of the Three Forks
  • the most recent USGS survey, back in 2010, or whenever it was, was based on technology in use at that time, and certainly did not include the new completion techniques; the projections may not have even included pad drilling (I don't know)
  • everyone pretty much agrees that the Bakken has 500 billion bbls of original oil in place
  • at one time, Harold Hamm went out on a limb and suggested nearly 1 trillion bbls of OOIP (I have the slide presentation archived); in later presentations the OOIP was scaled back to 500 billion bbls
  • everyone pretty much agrees that the minimum primary production from the 500 billion OOIP will be 7%; some will say no more than 3%; some will say a lot more than 7%; take your pick; I'm sticking with a minimum of 7% x 500 billion bbls gets you 35 billion bbls
  • the North Slope of Alaska has produced somewhere in the neighborhood of 7 billion bbls (if I recall correctly; don't quote me on that; if it's important for you, go to the source)
  • at one million bbls production / day, and 35 billion bbls recoverable, we are talking 35,000 days of production = 96 years (slightly less due to leap years which add a day every four years)
  • when the USGS did their survey back in 2010, or whenever it was, the EUR of a Bakken well was said to be in the 300K to 500K range; since then, significantly increased; in the "holy Grail," the EUR of the QEP wells are now in the one million range
  • Bentek predicted a long, long time ago -- maybe back in 2010 or whenever it was -- that the Bakken would peak out at 2.1 million bopd
The bottom line for me: if the price is right and the demand is there, the Bakken will easily produce 2.1 million bopd.

Putting that into perspective:
  • many folks seem to interchangeably substitute "North Dakota" for the "Bakken" and vice versa
  • the Bakken in North Dakota represents about a third, probably less, of the entire state of North Dakota; it's a very, very small area in North Dakota; the Bakken/Three Forks extends into South Dakota (technically, but not much will happen there); Montana (a bit more, but not much); and then into Canada (significantly more than Montana but how significantly, I don't know)
  • Saudi Arabia is currently producing about 10 million bopd; to get to 12 million bopd is a stretch (and that's only a 20% increase; 2/10 = 20 increase)
  • North Dakota (not just the Bakken) is producing 1 million bopd; if the price is right and the demand is there, the Bakken will easily product 2 million bopd; that's a 100% increase in production; a doubling of production
  • Saudi's 20% increase will come with great effort (based on their 5-year $35 billion sustainment program announced in 2012)
  • Saudi says the kingdom could become a net importer of oil in 25 years; my granddaughters will know; I won't be around so I will never know
  • North Dakota will never become a net importer of oil; North Dakota will be exporting oil easily through 2100
If the decline rate of the Bakken was irrelevant from the very beginning -- back in 2007 -- the decline rate has become even more irrelevant in 2015. I talked about the decline rate issue often in the early days of the Bakken and am not interested in going over plowed ground now. The decline rate issue has a lot do with one's perspective.

One has to laugh. With the current slump in oil prices and the choking back of oil wells in the Bakken, one might not even notice the decline rate.

By the way, no one has recently talked about the Red Queen falling off her treadmill which relates to the decline rate. The active rig count in North Dakota has plummeted:
  • April 30, 2014: 187
  • March 31, 2015: 99
  • April 30, 2015: 86 
One year ago (using most recent data available, April, 2015), there were 187 active rigs; on April 30, this year, 86 rigs. Is that less than half? Let's see: 86 x 2 = 172. Yup, less than half. In April, last year (2014), North Dakota hit a milestone, producing just over one million bopd for the first time in the history of the state. With a record number of active rigs and the number of rigs increasing, North Dakota hits 1 million bopd.

One year late with a plummeting in the number of active rigs, the state still produces well over 1 million bopd.

But as noted in another post, the number of active rigs is only one data point. In addition  to "retiring" rigs, operators are cutting back the number of days wells are producing and they are choking back the amount of production when producing. Operators who do not meet new flaring rules are severely penalized. So, with retiring active rigs, cutting back the number of days production on any given well, choking back on daily production, and the state still exceeds the million-barrel threshold.

How many folks remember this?
Producing wells:
  • March, 2015: 12,443
  • April, 2015: 12,537
Wells capable of producing in April, 2015: 14,119
  • 1,582 wells capable of producing were off-line 
It's probably a meaningless data point, but it seems to be something to keep in mind when discussing the overall crude oil production potential in North Dakota.

Bottom line: if the price is right, and the demand is there, we are not going to see a decline in Bakken production year-over-year for many years. If the price is not right and the demand is not there, hey, folks, great news -- the US consumers should be filling their SUVs with inexpensive gasoline.

It's a long note, but I think it's important for newbies to get a handle on the "decline rate" of the Bakken since it still comes up so often.

The reason operators like the Bakken:
  • it's an oily play: 94% or better crude oil production vs 75% or less in other oil plays
  • Bakken wells in the best Bakken pay for themselves in six months; if the price is right, Bakken wells outside the core, will pay for themselves in two years
  • the wells will continue to produce for decades
  • the infrastructure is getting there; improving every day; and, it's already pretty good
  • great working relationship with the state
  • great working relationship with the local population
This will be the third time I've said it: the data point in the next Director's Cut that I am most curious about is the fracklog. However, after seeing that Investor Village note (the note from the discussion group above), it will be interesting to see what the price of Bakken was selling for in April. We might be surprised.

A huge "thank you" to Don for sending me that Investor Village link.

Recession? What Recession? Look What Steven Spielberg Just Did -- June 14, 2015

Stories I am eagerly waiting for on Monday:
  • the fracklog: the number of wells waiting to be fracked in the Bakken; if it goes over 900 -- one word: wow;
  • update on Greece, now that negotiators have had another weekend to think about it; and,
  • whether Monday will be the day that the Supreme Court announces it's ObamaCare decision
I assume the Director's Cut will be released Monday. It's hard for me to believe the fracklog won't increase; it's impossible for me to track the number precisely but it sure seems like more wells are going to SI/NC status than are coming off the "producing wells now completed" list, but I could be wrong. I don't have anything to compare it to, but 900 wells waiting to be fracked seems outlandish.

By the way, when I get back to blogging, another thought on the Bakken -- relative to the Director's Cut with the April, 2015, data.

Tonight: it's all about LeBron. The series is tied (2 - 2) and it's now best of three games. Two of the three games, I believe, will not be in Cleveland.

This, by the way, is even cooler. It appears Tesla sent some engineers to replace a battery on Philae, the ESA comet lander

By the way, that ObamaTrade bill that no one has read? Hillary Clinton has "no comment" until the "deal is final" -- one way or the other. Showing her leadership, again.

From The Los Angeles Times: 'Jurassic World' makes movie history with $204.6 million, second-biggest U.S. opening ever.
Jurassic World," the reboot of the Steven Spielberg franchise about genetically engineered dinosaurs who wreak havoc on humans, stunned Hollywood and chomped its way into movie history, collecting an estimated $204.6 million domestically in its opening weekend.
The launch of the Universal film exceeded even the most optimistic projections in scoring the second-largest North American opening weekend ever and becoming only the second film to debut beyond the $200-million mark. 

"Marvel's The Avengers" in 2012 is the only film to perform better than "Jurassic World" with an opening of $207.4 million. The dinosaur epic blasted ahead of this year's "Avengers: Age of Ultron," which debuted at $191.3 million, according to Rentrak.
The worldwide appetite for "Jurassic World" was also massive, collecting $307.2 million in 66 territories, beating the previous record holder "Furious 7" with $250.4 million.
And finally for those following the Tim Mellon - Ric Gillespie "feud" over Amerlia Earhart, Fox has an update.

Sophia Debuts As Drummer!
Live! At The Perot Museum In Downtown Dallas, Texas!
One Night Engagement Only!

Enquiring Minds Want To Know -- June 14, 2015


February 6, 2018: instead of $109 billion, Saudi Arabia will now build a solar energy project costing upwards of $7 billion; paid for by the developer

June 22, 2015: long article in Atlantic Monthly. A lot of data. Bottom line, Saudi Arabia is likely to be a net oil importer by 2040. The linked article did not mention that Saudi Arabia has announced that the $109 billion solar program has been delayed for eight years. Saudi Arabia has a severe cash flow problem. They are betting they can cripple the US oil and gas industry. By the end of calendar year of 2016 we will know if Saudi Arabia was successful.

It would be interesting to see Bloomberg, or better yet, the Guardian or The (London) Telegraph pick up on this story.

These are the facts:
  • water is becoming a bigger and bigger challenge for Saudi Arabia
  • they have 30+ desalination plants scattered around the kingdom each of which is very, very energy-intensive
  • Saudi uses 1.5 million bopd to run those desalination plans (this number will increase over time)
  • Saudi's oil production had fluctuated around 9.75 million bopd until recently when it hit a record 10.33 million bopd
  • Saudi Arabia knows that it cannot go on forever using a non-renewable resource (oil) to run their desalination plants
  • Saudi Arabia probably has the world's most potential for solar energy
  • Saudi Arabia has a very close relationship with China and can get solar panels cheaper than anyone else
  • Saudi Arabia has tons of cash; more than enough money to build solar farms
  • Saudi Arabia is not encumbered by / with Greenpeace, the Sierra Club, Tom Steyer, or George Soros
  • Saudi Arabia does not have a history of being environmentally-sensitive about the desert
Saudi Arabia recently announced a $109 billion solar energy program to run their desalination plants.
But then, out of the blue, on May 22, 2015, the Guardian reports in passing that Saudi has decided to delay that program for eight years. (If that link is broken, see this post.)

With all the data points noted above, one has to ask the question -- why would Saudi Arabia delay their solar energy program?

Whenever my granddaughters ask me a question I cannot answer, I tell them to a) follow the money; or, b) google it.

Google provides 368,000 hits to this query: why did Saudi Arabia delay its solar energy program? The first is a Bloomberg article dated January 19, 2015.
Saudi Arabia is delaying by eight years its target to complete clean-energy program including $109 billion in solar power, saying it needs more time to assess what technologies it will use
The project was originally intended to produce a third of the nation’s electricity from solar panels by 2032 and more from wind, geothermal and nuclear reactors. The ambition was to save more crude oil for export.
“We have revised the outlook to focus on 2040 as the major milestone for long-term energy planning in Saudi Arabia,” said Hashim Yamani, president of the King Abdullah City for Atomic and Renewable Energy, the royal agency established to oversee renewable energy policy.
The comments at a conference in Abu Dhabi yesterday are a blow to the kingdom’s effort to feed its rapidly growing population’s demand for more electricity. The world’s largest oil exporter is having to divert crude supplies for domestic power generation during the hottest summer months, reducing its main source of income.
King Abdullah’s government set out its ambitions for diversifying its energy supplies in May 2012, the year after an influential Chatham House paper suggested business-as-usual policies would leave the kingdom a net oil importer by 2038. 
So, that's the google answer -- " ... it needs more time to assess what technologies it will use."

That sounds overly suspicious, but we will come back to this later.

The second way to find the answer: follow the money, and in that linked Bloomberg article, the very next paragraph provides that answer:
A plunge in oil prices is only concentrating officials on how to get value out of the program, said Paddy Padmanathan, chief executive officer of ACWA Power International, a Riyadh-based power plant developer likely to build some the plants.  
From there, the comments by the Saudis become awkward, bizarre, complex, and disingenuous (a, b, c, and d).

This country admits that it may become a net oil importer by 2038 and with a goal to increase production now, that day of reckoning may come sooner than later. Saudi needs oil to a) fuel their desalination plants; b) to feed their new refinery programs; and, c) to provide electricity (air conditioning) for their own population which continues to grow. That's why Saudi could be a net importer of oil in the not-too-distant future.

So, the first "why"? Why would Saudi scrap a solar energy program to save their one natural resource?

Answer: cash flow.

Second "why"? Why is Saudi having a cash flow problem? The simple answer is the slump in oil prices. But I think that's too simplistic. First, of all, I think I recall that Saudi has about $750 billion in cash reserves. A $109 billion project spread out over many years would hardly cause a dent. Also recall, that Saudi Arabia recently went on the open market to borrow money to finance "its soaring deficit." (By the way, that link takes you to an incredible AFP article dated April 8, 2015).

So, yes, there is a slump in oil prices, but Saudi a) saw that coming; and, b) orchestrated it. (Maybe more than they expected.)

So the third "why"? Or better, "what"? If not just the slump in oil prices, what else is causing a cash flow problem for Saudi Arabia. What is new between October, 2014, and April, 2015. Several things: a) ISIS attacks within the kingdom; b) an expensive shooting war in Yemen; and, c) tough love from the US -- President Obama says the US is no longer responsible for Saudi Arabia's security.

But is there more? Yup. There always is. Look at that Bloomberg story again. Deep in the story, this paragraph:
“Does the reduction in oil price mean everything is going to go backward? I don’t think so,” said Padmanathan. “It focuses everybody’s mind on efficiency and on thinking long term.” 
What could possibly be meant by that? An expensive solar energy program gets you one thing -- expensive energy. Nothing else.

What else has happened between October, 2014, and April, 2015 in the Mideast? You guessed it. A growing Iranian threat. It is clear that the US, through Valerie Jarrett's behind-the-scenes maneuvering, is out to re-establish the Persian Empire. Saudi Arabia is not blind to this.

The dirty little secret that Saudi Arabia and Israel have a very close relationship is now out. It was leaked by the Obama administration and the mainstream media carried that water for the administration. It was also leaked that the Israelis have also had a nuclear program for a long, long time. Everyone knew that but it was not being publicly acknowledged in ways it had not been acknowledged before (wow, that's a lousy sentence).

Bottom line: the Mideast is "going nuclear" and there is an internal struggle among the Saudi princes: will they get a better bang for their buck going nuclear or going solar?

Well duh.

With expensive solar energy, one gets expensive electricity and no fireworks. With expensive nuclear power, one a) joins the world's elite nuclear club; b) gets cheap electricity; and, c) gets the fireworks if necessary.

Speaking Of Solar Technology

By the way, speaking of solar technology, there is a most interesting story coming out of Calfiornia. The Wall Street Journal is reporting the dirty little secret that solar energy developers always knew but tried to keep quiet: 
Some costly high-tech solar power projects aren’t living up to promises their backers made about how much electricity they could generate.
Solar-thermal technology, which uses mirrors to capture the sun’s rays, was once heralded as the advance that would overtake old fashioned solar panel farms. But a series of missteps and technical difficulties threatens to make newfangled solar-thermal technology obsolete.
The $2.2 billion Ivanpah solar power project in California’s Mojave Desert is supposed to be generating more than a million megawatt-hours of electricity each year. But 15 months after starting up, the plant is producing just 40% of that, according to data from the U.S. Energy Department.
Power tower technology:
The sprawling facility uses “power towers”—huge pillars surrounded by more than 170,000 mirrors, each bigger than a king-size bed—to capture the sun’s rays and create steam. That steam is used to generate electricity. Built by BrightSource Energy Inc. and operated by NRG Energy Inc., Ivanpah has been advertised as more reliable than a traditional solar panel farm, in part, because it more closely resembles conventional power plants that burn coal or natural gas. NRG co-owns the plant with Google Inc. and other investors. 
Turns out, there is a lot more to go wrong with the new technology. Replacing broken equipment and learning better ways to operate the complex assortment of machinery has stalled Ivanpah’s ability to reach full potential, said Randy Hickok, a senior vice president at NRG. New solar-thermal technology isn’t as simple as traditional solar panel installations. Since older solar photovoltaic panels have been around for decades, they improve in efficiency and price every year, he said.
Before I go on: this is poppycock -- "new solar-thermal technology isn't as simple as traditional solar panel installations." Sounds like whining. The nuclear energy industry has much more challenging problems. The oil industry has many more challenges due to an anti-oil atmosphere in Washington -- just ask BP. Ask the Bakken operators who can be charged with a felony for one dead migratory duck. It sounds like Hickok is not up to the challenges involved in procuring and replacing solar panels.

In a free market system, there's a reason folks opt for fossil fuel over solar energy or wind energy.

It turns out NRG's Ivanpah is not the only solar farm that over-promised, and under-delivered:
Ivanpah isn’t the only new solar-thermal project struggling to energize the grid. A large mirror-powered plant built in Arizona almost two years ago by Abengoa SA of Spain has also had its share of hiccups. Designed to deliver a million megawatt hours of power annually, the plant is putting out roughly half that.
Back to Ivanpah. Why is Ivanpah underpeforming. Get ready for obfuscation. First:
One big miscalculation was that the power plant requires far more steam to run smoothly and efficiently than originally thought, according to a document filed with the California Energy Commission. Instead of ramping up the plant each day before sunrise by burning one hour’s worth of natural gas to generate steam, Ivanpah needs more than four times that much help from fossil fuels to get the plant humming every morning.  
You, you read that correctly. This solar farm relies on natural gas to get it up and running each day; and it takes much longer than expected.

How was this missed? Either the engineers mis-calculated this (hard to believe; engineers are pretty smart folks) or the top floor brass refused to believe them. Or the top floor brass knew that including that fact in the original plans would have made it more difficult to sell the program, but I don't for a minute think the engineers missed this by this wide a margin. If so, some engineer needs to be held accountable. Don't hold your breath.

Another unexpected problem: not enough sun. Weather predictions for the area underestimated the amount of cloud cover that has blanketed Ivanpah since it went into service in 2013.
Oh, give me a break. The company had 100 years of sunshine / cloud cover data available and lo and behold, these past 18 months were an anomaly. If you believe that, I'm sure we can find you a bridge in the desert to buy.

It turns out, that, in general, solar farms are under-performing nameplate capacity. One of the reasons always stated: there is less sunshine than expected. But if there's not enough sunshine in southern California / Nevada, how in the world do solar enthusiasts think there's even a remote chance of enough solar energy to power the world ... ever.

By the way, does that sound familiar: ".... there is less sunshine than expected"? It turns out that's the same excuse wind farm advocates use when wind farms under-perform: "there is not as much wind as expected." (And, some days, it's too windy to let the blades spin.)

But again, for those who missed it the first time around:
  • solar farms don't generate electricity during the night (they need fossil fuel plants to back them up)
  • some solar farms require hours of natural gas to power them up in the morning
  • solar farms aren't particularly efficient during periods of cloud cover
  • wind farms don't generate electricity when the wind does not blow (they need fossil fuel plants to back them up)
  • wind farms aren't particularly efficient during low wind or high wind conditions
  • the torque on the towers suggest the half-life of a typical wind tower is about seven years
But I digress.
I don't think any of this relates to why Saudi Arabia delayed their own solar energy program. As noted earlier, I think it's an internal princely debate whether to go nuclear or to be environmentally friendly to gain brownie points with the Sierra Club and go solar, but these dismal reports about efficiency of solar energy sure don't help the Saudi environmentalists.

By the way, did anyone else have a vague recollection regarding BrightSource? You are not imagining things. From a October 10, 2014, post:
A solar-energy company has dropped a proposal to build a 75-story solar tower near California’s Joshua Tree National Park employing a kind of solar technology that can cause birds to ignite in midair.
The California Energy Commission was slated to vote on BrightSource Energy’s project this month, before the company withdrew its application.
The plant would have used “power tower” technology that trains concentrated solar power on steam boiler towers. State and federal officials and conservation groups say a similar BrightSource tower near the Nevada border proved unexpectedly deadly to birds that flew through the concentrated rays.
That BrightSource tower near the Nevada border is obviously the Ivanpah site. I didn't catch whether Hickok mentioned anything about KFC bird kills caused by his company.

Week 23: June 7, 2015 -- June 13, 2015

Without question, the top story is the fact that North Dakota sustained production month-over-month despite dropping to lowest rig count post-boom in April. See earlier posts. Another top story: North Dakota ranked #1 in 2014 for fastest GDP growth.

Top stories of the week
Maintains production level despite low rig count, choking back
North Dakota ranked #1 in 2014 for fasted GDP growth
Putting the Bakken into perspective: 35 billion bbls vs 7 billion bbls from the North Slope
Nationwide, gasoline demand surges
Mike Filloon on QEP wells in the Bakken
US overtakes Russia as #1 fossil fuel energy producer in the world

Coolest story of the week
Using boiling post-frack (produced} water for geothermal electricity

North Dakota vs Saudi
Random update of MRO's Gertrude Tuhy well; Whiting's Smith Federal wells; on a Hess Kvam well; Slawson's stacked dual lateral; Hess' 18-well pad; QEP wells in the Grail;
Random examples of how operators cut back oil production
New low: active rig count down to 76
Huge day in the Bakken; slowdown? what slowdown? twelve producing wells completed; four new permits; eleven high-IP wells reported thirteen wells coming off confidential list
Huge day in the BAkken; slowdown? what slowdown? eight wells coming off the confidential list; seven new permits; four producing wells completed;
Huge day in the Bakken: 19 new permits
ERF to accelerate
OXY USA is the anti-Statoil 
The Bakken: another word for "resilient"
There's a whole lot more going on that rig counts

EOG reports a 63-stage frack; using almost 20 million lbs of sand
Another example: EOG used almost 20 million lbs of sand in a 50-stage frack; and, a 55-stage frack

Bakken economy
Housing boom in the Bakken
Bakken economy milestones being celebrated
Dickinson's Menards biggest to date; Williston's Menards will be bigger

EOG SOP for shutting in neighboring wells when fracking
Bakken - WTI price differential has narrowed 

First drone manufactured in North Dakota rolled out

Government lies
NOAA fakes satellite images of ND flaring; story is also here;