Friday, June 26, 2015

Week 25: June 21, 2015 -- June 27, 2015

The July dockets are out. Highlights here.
Have we weathered the worst? WPX talks about increasing activity.
Russia become top oil supplier to China; displaces Saudi Arabia which slips to third behind Angola.
Could drillers see as much as 20% of OOIP recovered through primary production?
The Bakken is defying oil price gravity -- Richard Zeits
ETE makes unsolicited offer for WMB

QEP to request permission for 24 wells on each of two 1280-acre drilling units
Oasis: a high-intensity story
The wells keep getting better

New federal fracking rule on hold

Under-the-lake pipeline approved

Minnesota refinery sees new life with Bakken oil

Bakken economy
Cashwise in Dickinson opens

Going On Vacation -- June 26, 2015

I am going to recharge my batteries over the next three weeks. To recharge my batteries, two things:
  • time with my granddaughters will take priority
  • the blog will be less important
Readers should probably expect 
  • fewer posts
  • longer gaps between posts
  • a more cavalier approach to blogging (except the Bakken; my posts on the Bakken -- except the I-98 series -- are always serious)
Readers will be advised to check in on the blog not more than once every 36 hours and then scroll down for updates. I often update posts that are up to two days old.

I will eventually get to all e-mail but I may not answer e-mail as quickly as I like, and I may not link articles as quickly as I like; I may link articles and provide less "cut and paste" and fewer comments.

Sometime in the next 24 hours, my wife and I will be in the front seat of our minivan and our two older granddaughters will be somewhere else in the minivan and we will begin our annual cross-country trip to California.

The itinerary I have thought about but not discussed with my fellow travelers:
  • Grapevine to Santa Rosa: 7 hours, Google (10 hours, reality)
  • Santa Rosa: 2 hours
  • Santa Rosa - Albuquerque: 2 hours, Google (3 hours, reality)
  • Albuquerque - Grand Canyon: 6 hours, Google (8 hours, reality)
Other data points:
  • Albuquerque - Winslow: 4 hours
  • Winslow, AZ to Grand Canyon: 2 hours
Short term goals:
  • Blue Hole in Santa Rosa
  • Nuclear energy museum, Albuquerque
  • Grand Canyon
  • Sedonia
Medium term goals:
  • Flagstaff
Long term goals:
  • San Pedro
  • July 4th party

Active Rig Count Back To Post-Boom Low;

Active rigs:

Active Rigs75192187214170

Eleven (11) new permits --
  • Operators: Oasis (4), Petro-Hunt (4), XTO (2), Sinclair
  • Fields: Siverston (McKenzie), Charlson (McKenzie), Grinnell (Williams), Sanish (Mountrail)
  • Comments: the Charlson is a very, very exciting field; I do not recall having seen a recent Charlson permit until today
No producing wells reported as completed. A very short one-page report today.

I'm wondering if folks have given any thought to why Whiting has a record (?) number of "pooling" cases scheduled for the July, 2015, NDIC hearing dockets. I have a thought. Curious what others might be thinking.

Scairt Woman Oil Field -- June 26, 2015

In the July, 2015, NDIC hearing dockets, Gadeco is requesting Bakken spacing for a small oil field in McKenzie County. It's a fairly obscure field, was an old Madison / Red River / miscellaneous field, drilled back in the early 1980's. There are no active wells in this field any more as far as I can tell.

This is the area in which Scairt Woman is located, "Rough Rider" country:

This is Scairt Woman as it looks today (not much there, yet):

Friday Shorts -- June 26, 2015

EIA "energy cookie":
As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations (shale gas) or crude oil from tight formations (tight oil): the United States and Canada, and more recently, Argentina and China. Beyond these four countries, other countries have started exploring hydrocarbons from shale and other tight resources, but they are still short of reaching commercial production. --- EIA
Okay.  We'll have to keep an eye on Argentina.

Drachma Drama

Here it comes, LOL, Reuters is reporting:
The euro zone can help Greece repay maturing debt in the coming months with money that remains available to Athens under the current bailout if the program is extended by five months to November, a note prepared for euro zone finance ministers said.
The Greek negotiators must be laughing all the way to the bank. Angela's blood pressure continues to rise. The Germans are frustrated. The French are simply looking forward to August when all French citizens go on vacation.

It appears the negotiators don't want to spoil a perfectly good summer. They just want the Greek problem to "go away" until November. 

Key Dates With Regard To Slump In Oil Prices -- June 26, 2015

Previously posted (June 22, 2015) but I wanted to re-post for various reasons.

It's pretty clear, based on:
  • new permits
  • number of active rigs
  • production profiles
  • number of wells coming off confidential list
  • number of wells on fracklog
... that new Bakken production has shut down. 

Key dates:

The next key point is when we reach bottom; we won't know that date until one month to six months after it has happened. The "bottom" won't be affected by weather in North Dakota until January - February, 2016, time frame. Until then, the operational data coming out of the Bakken won't be affected by weather. Between late December, 2015, and June, 2016, weather will play a factor. Data between now and December 1, 2015, is still meaningful when trying to assess when the bottom has been reached or will be reached; but data between late December, 2015, and June, 2016, will make "predictions" difficult.

For example, one might see a small uptick in the number of rigs by the end of November, 2015, but then be frustrated to see that rig count drop again in the winter. Likewise, we may start to see an increase in fracking later this summer and into December, but after that, all bets are off.  

With regard to key dates above, production was tapering off between October, 2014, and June 20, 2015, but "new Bakken production shuts down" is finally here. By "new Bakken production shuts down," I mean that operators are producing only what they absolutely need to produce to survive. They may not even be producing all the oil they need to produce to meet refinery contracts; they could be buying cheaper oil on the "spot" market. There are obviously contracts with regard to transportation (pipeline or CBR) but the former (pipeline) is less flexible, and the latter (CBR) is more flexible.

NDIC Hearing Dockets, July 22 - July 24, 2015

Disclaimer: these summaries are for my personal use only; you are free to read them; don't quote me on them; there will be typographical and factual errors.  If this is important to you go to the source. Link here.

Past dockets are archived here.

This post explains the reason for the flaring cases.

Wednesday, July 22, 2015

23432, cont'd
22837, cont'd
22646, cont'd
24181, CLR, Blacktail-Bakken, proper spacing, Billings
24182, CLR, Banks-Bakken, establish an overlapping 5120-acre unit,4 wells; set back rules; McKenzie
24183, CLR, Banks and North Tobacco Garden-Bakken, 14 wells on an existing 1280-acre unit; set back rules; McKenzie
24184, CLR, Camp-Bakken, 22 wells on an existing 2560-acre unit; 28 wells on an existing overlapping 2560-acre unit; set back rules; McKenzie, Williams
24185, CLR, Wheelock and Brooklyn-Bakken, 2 wells on each of 2 overlapping 2560-acre units; set back rules: Williams
24186, CLR, Alkali Creek and Elm Tree-Bakken; establish an overlapping 2560-acre unit; 1 well, set back rules; Mountrail, McKenzie
24002, cont'd
24187, Triangle, Foreman Butte, Pronghorn, and/or Rawson-Bakken, establish four overlapping 2560-acre units; multiple wells; McKenzie
24188, Triangle, Sather Lake, Antelope Creek and/or Ellsworth-Bakken, establish four overlapping 2560-acre units, multiple wells, McKenzie
24189, Triangle, Elk and/or Glass Bluff-Bakken, establish four overlapping 2560-acre units, multiple wells, McKenzie
24190, Samson Resources, Blooming Prairie-Bakken, establish an overlapping 2560-acre unit; 1 well; establish an overlapping 5120-acre unit, multiple wells; Divide
24138, cont'd
24191, EOG, Parshall-Bakken, establish a 960-acre unit, multiple wells, Mountrail
24192, Newfield, flaring
24193, Newfield, flaring
24194, Newfield, flaring
24195, Newfield, flaring
24196, Newfield, flaring
24197, Newfield, flaring
24198, Newfield, flaring
23922, cont'd
24199, XTO, Capa-Bakken, establish seven overlapping 2560-acre units, 2 wells; Williams
24200, XTO, Alkali Creek-Bakken establish an overlapping 2560-acre unit, 2 wells, Williams, Mountrail
24201, XTO, Beaver Lodge-Bakken, establish an overlapping 2560-acre unit; 2 wells, Williams
24202, XTO, Tobacco Garden-Bakken, set back rules; McKenzie
24139, cont'd
24203, SHD, Deep Water Creek Bay-Bakken, set back rules; McLean, Dunn
24204, SHD, Deep Water Creek Bay-Bakken, set back rules; McLean, Dunn 
24205, SHD, Deep Water Creek Bay-Bakken, set back rules; McLean, Dunn
24206, SHD, Heart Butte-Bakken, set back rules; Dunn
24135, cont'd
24207, treating plant
24143, cont'd
23646, cont'd
24208, XTO, pooling
24209, XTO, pooling
24210, XTO, commingling
24211, XTO, commingling
24212, XTO, commingling
24213, XTO, commingling
24214, XTO, commingling
24215, XTO, commingling
24216, XTO, commingling
24217, XTO, commingling
24218, XTO, commingling
24219, XTO, commingling
24220, XTO, commingling
24221, XTO, commingling
24222, XTO, commingling
24223, XTO, commingling
24224, XTO, commingling
24225, XTO, commingling
24226, XTO, commingling
24227, XTO, commingling
24228, XTO, commingling
24229, XTO, commingling
24230, XTO, commingling
24231, XTO, commingling
24232, XTO, commingling
24233, XTO, commingling
23826, cont'd
24234, Peregrine Petroleum Partners, 4 wells on an existing 640-acre unit, Top Butte-Bakken, McKenzie
24152, cont'd
24235, White Butte, flaring
24236, White Butte, flaring 
24237, White Butte, flaring
24238, WPX, flaring
24239, WPX, flaring
24240, WPX, flaring
24241, Sinclair, pooling 
24242, Sinclair, pooling 
24243, Sinclair, pooling 
24244, Sinclair, risk penalty legalese
24245, Sinclair, risk penalty legalese
24246, Sinclair, risk penalty legalese
24247, Sinclair, risk penalty legalese
24248, CLR, commingling
24249, CLR, commingling
24055, cont'd
24250, Ballard Petroleum, commingling
24251, Hunt, flaring
24252, Hunt, flaring
24253, Hunt, commingling
24254, Hunt, commingling
24255, Enduro Operating, commingling
24256, EOG, SWD
24160, Samson Resources, pooling
Wednesday, July 22, 2015

24366, CLR, Rattlesnake Point-Bakken, 10 wells on each of 2 existing 1280-acre units, Dunn 

Thursday, July 23, 2015

23957, cont'd
24257, Hess, Robinson Lake and/or Alger-Bakken, establish an overlapping 2560-acre unit; 1 well, Mountrail
24070, cont'd
23517, cont'd
24258, Whiting, Sanish-Bakken, establish six overlapping 2560-acre units; 11 wells on each, 66 wells, Mountrail
24259, Oasis, Willow Creek and/or Camp-Bakken, establish an overlapping 5120-acre unit; 2 wells, Williams, McKenzie
24260, MRO, Antelope-Sanish, 15 wells on each of two 1280-acre units; establish a 2560-acre units; 1 well, 31 wells, McKenzie
24261, MRO, Corral Creek-Bakken, proper spacing in section 6 and part of section 7 which is not included in the Corral Creek Bakken Unit, Dunn
24262, QEP, flaring
24073, cont'd
24075, cont'd
24080, cont'd
23580, cont'd
23581, cont'd
23582, cont'd
23641, cont'd
23642, cont'd
23643, cont'd
24263, Whiting, pooling,
24264, Whiting, pooling,
24265, Whiting, pooling,
24266, Whiting, pooling,
24267, Whiting, pooling,
24268, Whiting, pooling,
24269, Whiting, pooling,
24270, Whiting, pooling,
24271, Whiting, pooling,
24272, Whiting, pooling,
24273, Whiting, pooling,
24274, Whiting, pooling,
24275, Whiting, pooling,
24276, Whiting, pooling,
24277, Whiting, pooling,
24278, Whiting, pooling,
24279, Whiting, pooling,
24280, Whiting, pooling,
24281, Whiting, pooling,
24282, Whiting, pooling,
24283, Whiting, pooling,
24284, Whiting, pooling,
24285, Whiting, pooling,
24286, Whiting, pooling,
24287, Whiting, pooling,
24288, Whiting, pooling,
24289, Whiting, pooling,
24290, Whiting, pooling,
24291, Whiting, pooling,
24292, Whiting, pooling,
24293, Whiting, pooling,
24294, Whiting, pooling,
24295, Whiting, pooling,
24296, Whiting, pooling,
24297, Whiting, pooling,
24298, Whiting, pooling,
24299, Whiting, pooling,
24300, Whiting, pooling,
24301, Whiting, pooling,
24302, Whiting, pooling,
24303, Whiting, pooling,
24304, Whiting, pooling,
24305, Whiting, pooling,
24306, Whiting, pooling,
24307, Whiting, pooling,
24308, Whiting, pooling,
24309, Whiting, pooling,
24310, Whiting, pooling,
24311, Whiting, pooling,
24312, Whiting, pooling,
24313, Whiting, pooling,
24314, Whiting, pooling,
24315, Whiting, pooling,
24316, Whiting, pooling,
24317, Whiting, pooling,
24318, Whiting, pooling,
24319, Whiting, pooling,
24320, Whiting, pooling,
24321, Whiting, pooling,
24322, Whiting, pooling,
24323, Whiting, pooling,
24324, Whiting, pooling,
24325, Whiting, pooling,
24326, Whiting, pooling,
24327, Whiting, pooling,
24328, Whiting, pooling,
24329, Whiting, pooling,
24330, Whiting, pooling,
24331, Whiting, pooling,
24332, Whiting, pooling,
24333, Whiting, pooling,
24334, Whiting, pooling,
24335, Whiting, pooling,
24336, Whiting, pooling,
24337, Whiting, pooling,
24338, Whiting, pooling,
24339, Whiting, pooling,
24340, Whiting, pooling,
24341, Whiting, pooling,
24342, Whiting, pooling,
24343, Whiting, pooling,
24344, Whiting, pooling,
24345, Whiting, pooling,
24346, Whiting, pooling,
24347, Whiting, pooling,
24348, Whiting, pooling,
24349, Whiting, pooling,
24350, Whiting, pooling,
24351, Whiting, pooling,
24352, Whiting, pooling,
24353, Whiting, pooling,
23982, cont'd
24354, Hess, pooling,
24355, Hess, pooling,
24356, Hess, pooling,
24357, BR, Elidah-Bakken, 2 wells on a 2560-acre unit, McKenzie
24358, BR, pooling,
24359, BR, pooling,
24360, BR, pooling,
24361, Lime Rock Resources III-A, LP, Stanley-Bakken, 6 wells on three 640-acre units; 6 wells on a 1280-acre nit; 14 wells on each of seven 1280-acre units; 6 wells on each of three 2560-acre units; Mountrail;
24362, QEP, Grail-Bakken, 24 wells on each of two 1280-acre units, McKenzie
24363, Oasis, SWD
24364, White Energy, SWD

Thursday, July 23, 2015, Supplement

24365, Gadeco, Scairt Woman Field, establish Bakken spacing for four 1280-acre units; McKenzie 

 Friday, July 24, 2015

23800, cont'd
23802, cont'd

Friday, June 26, 2015

Active rigs:

Active Rigs76192187214170

RBN Energy: Canadian oil production.
The latest forecast from the Canadian Association of Petroleum Producers (CAPP) was published a couple of weeks ago. In spite of lower crude prices CAPP continue to forecast growth in Canadian crude output to 2030 – albeit at a slower pace than previously expected. Continued growth means that takeaway constraints getting Canadian crude to market remain a key challenge – even though increased use of crude-by-rail has taken up some of the slack. Today we conclude our review of the 2015 CAPP outlook.
CAPP is the voice of Canada’s upstream oil and natural gas industry. Their annual long-term outlook covers Canadian crude production, markets and transportation. In Part 1 of our review we covered the latest CAPP crude forecast – that is based on producer surveys. CAPP still expects Canadian production to grow between 2015 and 2030 even after the crude price crash in the second half of 2014. About 94% of Canadian production in 2014 came from Western Canada 62% of that is heavy crude from the oil sands.
The 2015 CAPP forecast includes 2 cases for oil sands production. Under the growth scenario total production is forecast to increase 1.43 MMb/d from 3.9 MMb/d in 2015 to 5.33 MMb/d in 2030 – about 1.1 MMb/d lower than the 2014 forecast. Under the “operating and in construction” scenario production growth between 2015 and 2030 only reaches 4.35 MMb/d –over 2 MMb/d less than the 2014 forecast. The biggest market for Canadian crude is U.S. refineries – that absorb nearly all exports. CAPP analysis of 2014 data shows that Canadian crude has achieved a 50% market penetration in the Midwest with far smaller shares of the East and West Coast markets. The largest opportunity for heavy oil sands crude remains the Gulf Coast – where Canadian barrels could potentially replace 2MMb/d of imports from other countries like Mexico and Venezuela. This time we review CAPP’s analysis of progress in overcoming the infrastructure challenges faced by Canadian producers in delivering their crude to new markets.
As they did in 2014 CAPP again recognize the growing importance of rail transportation in plugging gaps in crude takeaway capacity. The 2015 outlook provides a summary of rail terminal development and the take up of rail capacity to date. In 2014 crude-by-rail (CBR) volumes shipped out of Western Canada averaged 185 Mb/d. CAPP expects that to increase to 200 Mb/d in 2015 and 250 Mb/d by 2016. But the volumes moved by rail are still quite volatile since it is largely used as needed when pipelines are full. That means when crude production declines due to planned or unplanned shutdowns at production sites – crude by rail volumes drop off quickly.
However, CAPP predicts that if the Keystone XL pipeline were not in place by 2018, rail volumes would increase to between 500 and 600 Mb/d (and would decline if the pipeline is built). Based on CAPP’s survey the available Western Canadian rail load capacity is 776 Mb/d – more than enough to cover requirements over the next three years.  
 Tesla: GM's response over at Seeking Alpha.